The Faster Payments Service (FPS) is the largest real-time payment system in the world that operates 24 hours a day, 7 days a week.
But how exactly does the Faster Payments process work?
It’s not too complicated. The entire process – which is just one of the means through which you can send payments with AccessPay by the way – can be explained in 8 simple steps.
Let’s go through each step, using this scenario as an example:
James wants to give £50 to his friend Myles, who has an account with another bank. James wants Myles to receive the money as soon as possible…
Step 1 – Customer contacts bank
James contacts his bank and instructs them to pay Myles £50. James can contact his bank in a number of ways:
- He can visit his nearest branch.
- He can telephone them.
- Also, he can go online and use his internet banking service.
Step 2 – Bank completes security checks
James’s bank carries out its normal security checks to verify that he is the genuine customer and that he can send a payment through this scheme. James may be asked to provide:
- A password.
- Personal information such as his date of birth.
- A security question that the bank has on record.
Step 3 – Payment instruction (customer)
In addition to specifying the amount, James provides his bank with the following information:
- The name of the account
- Myles’s bank sort code.
- Myles’s bank account number.
- A reference that will help Myles identify who the payment is from.
Step 4 – Payment authorisation (sending bank)
James’s bank (the sending bank) now completes the following actions:
- They check that James has enough funds for the transaction.
- They perform appropriate validation on James and his account.
- Afterwards, they send the transaction to the FPS.
In certain circumstances, the bank may need to hold the payment to undertake further fraud protection checks.
Please note: Once this step is complete, James can no longer cancel the transaction.
Step 5 – Payment instruction (FPS)
After checking that all the relevant details are included and properly formatted, the FPS sends the payment instruction to Myles’s bank (the ‘receiving bank’) and then debits James’s bank (the sending bank) to the tune of £50.
Step 6 – Payment authorisation (receiving bank)
Myles’s bank checks all the relevant details are included and properly formatted, and then lets the FPS know that they have accepted the payment.
Step 7 – Completion
The service credits Myles’s bank with £50 and sends a message to James’s bank to tell them the transaction was successful. James’s bank then marks the payment as complete.
Step 8 – Confirmation
Finally, James’s bank sends him a confirmation that the transaction was successful.
Note: If Myles’s bank is a member of FPS, he’ll normally be able to see the £50 credit and access his funds within minutes. If Myles’s account is with a non-member bank, then it may take longer.
If you think your business will be able to benefit from quick, easy and affordable Faster Payments, AccessPay’s specialist software could be just what you’re looking for. Feel free to get in touch if you want to find out more.