Faster Payments hit £24.9bn but set to explode

The UK Faster Payments Service (FPS) has processed £24.9bn of transactions in its first six months. The next half year will see a huge surge in take up as it gains trust.

The UK Faster Payments Service (FPS) has processed £24.9bn of transactions in its first six months. The next half year will see a huge surge in take up as it gains trust.

The Faster Payments Service offers people the ability to make internet banking and telephone transfers between banks in near real-time by helping clear payments in hours rather than the three days needed for Bacs payments.

VocaLink, which built and runs the Faster Payments Servicetechnology platform, said it can process 717 transactions every second. "Since the launch date we have processed 59.7 million faster payment transactions with a value of £24.9bn," said VocaLink.

Two thirds of all phone and internet payments are now processed through the Faster Payments Service, according to UK payments associationApacs.

Since its launch at the end of May the service has been rolled out in stages. FPS was available for telephone and internet payments at the end of May and for standing orders from 6 June.

Gareth Lodge, analyst at TowerGroup, said the introduction of the Faster Payments Service was very challenging because VocaLink did not have long to do it.

"Considering the timescale set by the regulators and the size and complexity of the project I think it has gone well. "He said any project that involves payments cannot afford to have technical problems because it is "built on trust."

"If there were any problems the whole service would be called into doubt," added Lodge. "The next six months should see a huge increase in volumes and value because, [now that it is trusted], people will start using the system in anger."

Apacs said, "The launch of the Faster Payments Service went extremely well the rollout of the system went smoothly and take-up has been high."

Shaun Willcocks, senior manager at PWC, said banks have prepared systems to cope with an increase in volumes. "As people become more aware of the system volumes are likely to increase."

The Faster Payments Service was the result of an agreement in December 2005 between the Office of Fair Trading and 13 UK banks.

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