The increase from the previous £100,000 maximum is the first time the scheme limit has been increased since 2010. The change has been made in order to meet growing demand from large corporate users. A further review of the scheme limit is planned during 2016, to ensure all customers’ needs continue to be met.

Faster Payments is the UK’s 24/7 real time payments service, processing virtually every mobile and internet banking payment made in the UK - over 1.1 billion Faster Payments worth £904 billion were processed in 2014. Strong growth is predicted to continue over the next 10 years, with business-to-business payments forecast to increase from 86 million payments in 2014 to over 300 million payments in 2024, driven in part by the opportunity to use Faster Payments for higher value payments.

Faster Payments currently has 11 participants that connect directly to the service, while a further 400 Payment Service Providers (PSPs) access the service indirectly through a sponsor bank. All of these banks and building societies are now able to receive payments of up to £250,000, 24 hours a day, seven days a week.

Each individual participating bank or building society makes its own competitive decision on the amount their customers can send per transaction or per day, within the bounds of the £250,000 scheme limit. Individual banks and building societies are expected to increase their own limits over the coming months.

To mark the change to the maximum scheme limit, new information on each participating bank and building society’s limits for their consumer and business customers has been published on the Faster Payments website.

Craig Tillotson, Chief Executive of Faster Payments, commented:

“Faster Payments’ status as a world-class service is backed by the strong demand we continue to see amongst consumers, businesses and corporate users. We believe that increasing the maximum payment value to £250,000 will continue to broaden the appeal of the service, helping to meet all service users’ needs and opening up opportunities for business to provide new services to their customers enabled by our higher value 24/7 service.”

The increase to the scheme limit has been made possible due to a recent change in the way participating banks and building societies settle their payments with each other. The ‘pre-funding’ settlement process, which was introduced in September 2015, eliminates shared risk and removes any implicit obligation for smaller participants to underwrite a share of larger participants’ transactions.

The scheme limit increase is the latest in a range of improvements to the Faster Payments Service designed to benefit end users and promote competition between PSPs by widening access to the service. Three challenger banks have so far committed to join the Faster Payments Scheme in 2016.