Today marks the second anniversary of the Faster Payments Service that has helped reduce UK payment processing time from three working days to near real time.
According to a recent Payments Council report, the service is well underway. Despite consumers’ slow initial adoption, two years on, the convenience of Faster Payments has generated more internet and telephone banking transactions than was originally anticipated.
Individuals are now making around ten million more one-off internet and phone payments per month than before the system was launched.
As the popularity of the Faster Payments Service grows, it presents a new challenge for the channel that banks must be prepared to overcome – volume. By 2018, Faster Payments are expected to account for £836 million worth of transactions.
Faster Payments is growing in popularity as not only is it quick and easy to use, but it is also acting as a replacement for more traditional methods of payment. With the rise of online accounting, cash alternatives such as debit and contactless cards, and
the demise of the cheque, the bank note is becoming less and less popular. It’s thought that by 2050 notes and coins will be altogether redundant.
There are many clear benefits linked to these advances in payment methods and technology for consumers and financial institutions alike. However, the challenge lies with the banks to ensure that they are capable of delivering against customer expectations
and fully supporting this payments revolution.