Faster Payments (UK)
What is Faster Payments (UK)?
Faster Payments (UK) is the UK's real-time system for sending money directly between bank accounts, available 24 hours a day, every day of the year. It moves funds in seconds rather than the one-to-three business days typical of older bank transfer methods, and it doesn't rely on the card networks that process debit and credit card payments.
Officially known as the Faster Payments Service (FPS), the scheme launched in 2008 and is now operated by Pay.UK, with VocaLink supplying the core infrastructure. Banks, building societies, and licensed non-bank payment firms connect to FPS either directly or through an agency arrangement with a direct participant. For merchants and payment platforms, FPS functions as a rail: the payer's bank sends funds to the payee's account, rather than the payee pulling funds through a card scheme or a mandate. This makes it a common settlement method for payouts, refunds, payroll runs, and payments initiated through apps.
Key facts
- Also known as: Faster Payments Service (FPS)
- Operated by: Pay.UK, with VocaLink providing the core infrastructure
- Launched: 2008
- Availability: 24 hours a day, 365 days a year, including weekends and bank holidays
- Value limit: up to £1 million per transaction under the scheme rules, though individual banks commonly set lower limits for their own customers
- Settlement type: the payee's account is credited within seconds; the sending and receiving banks settle their net obligations with each other separately, later the same day
How it works
- Payer initiates the transfer – through online banking, a mobile app, or an API, specifying the payee's account number and sort code.
- Sending bank checks and authorizes – the payer's bank confirms sufficient funds and a valid instruction, then submits the payment to the Faster Payments System.
- Central infrastructure routes the message – Pay.UK's infrastructure, run by VocaLink, forwards the instruction to the payee's bank in real time.
- Receiving bank credits the account – the payee's bank credits the funds, typically within seconds of the payer submitting the transfer.
- Banks settle net obligations – the sending and receiving banks settle the accumulated value of the day's Faster Payments between themselves later that day, rather than transaction by transaction.
Why it matters
- Funds land in the payee's account in seconds instead of the one-to-three business days BACS takes, cutting the wait for payouts, marketplace disbursements, and refunds.
- Because FPS doesn't rely on card networks, businesses can send or receive money without the interchange or scheme fees tied to card transactions.
- Round-the-clock availability means transfers submitted overnight, on weekends, or on bank holidays still complete without waiting for the next business day.
How it compares
| Method | Typical speed | Common use |
| Faster Payments | Seconds | One-off transfers, payouts, refunds, real-time payments |
| BACS | 2-3 business days | Payroll, supplier payments, direct debit collections |
| CHAPS | Same business day | High-value transfers, such as property purchases, with no scheme value cap |
Faster Payments is the UK's implementation of a broader category of systems that other countries run under different names and scheme rules.
