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5 Min. Read

What Are Faster Payments & How Long Does a Faster Payment Take?

What Are Faster Payments & How Long Does a Faster Payment Take?

There are lots of options out there to send one-off payments or transfer money to someone else. Usually, you only need a few details such as an email address and bank account details, like a sort code. You might have used other methods in the past like BACS or CHAPS.

But, the faster payment service is another option that can allow different types of payments to arrive almost immediately. And what’s better than money becoming available as soon as possible? Here is everything you need to know about faster payments and how long they take to process.

Here’s What We’ll Cover:

What Are Faster Payments?

How Long Do Faster Payments Take?

Key Takeaways

What Are Faster Payments?

Have you ever transferred money from one bank account to another? How efficient was the bank transfer and how long did it take for you to actually gain access to the funds? Faster payments were built and set up to help to make moving money and paying bills as easy as possible.

One of the worst things about transferring funds is waiting for the money to clear and possibly facing penalties for late payments. Faster payments make it so that customers of UK banks can move money around instantly.

And the great thing is that faster payments can get used for several different reasons. You can pay for a service or send money to family and friends. And once the money gets sent, there is no delay in the recipient being able to access it.

How Do Faster Payments Work?

The majority of payments that get made with faster payments get done automatically with the faster payment scheme. Basically, when you make a payment you will need to have their sort code and account number for the bank account where you’re transferring the money.

You simply log in to your bank account and then send the money. The recipient usually sees the money deposited into their account instantly, or at least within a few hours. They can then access and use that money right away and not have to wait for any holds to clear.

How Long Do Faster Payments Take?

Faster payments are typically available as soon as the money gets sent. So, if you need to pay a contractor for some work that got done, you can transfer the funds and they will see it in their account immediately.

There are some instances where it could take up to a few hours to complete and certain payments might take even longer. That’s usually only the case if a payment has been made outside of normal working hours, as a public holiday for example.

Banks or building societies that use faster payments are members of the Payment Services Directive. This directive has certain rules that were created by the European Commission.

Even though most payments get received instantly, there is a requirement that any payments must get made by the end of the next business day.

Are There Rules for Making a Faster Payment?

In order to use faster payments, your bank and the recipient's bank must be signed up to use the service. Most UK financial institutions are already members and allow customers to accept faster payments. There are actually less than 0.1% of banks that don’t use the Faster Payments Service.

If you aren’t sure if your bank offers the service, you can use a free sort code checker on the Faster Payments website to find out.

There is also an overall limit of £250,000 that can get sent. But some banks have their own limits and they could be as low as £10,000. Contact your bank and speak with a customer service representative to find out more information.

Key Takeaways

You might have used an alternative for transferring money in the past, like a BACS or CHAPS transfer. But BACS payments are typically used for regular payments, like individual payments to employees. BACS transfers can take up to three days.

CHAPS does offer same-day payments but there is a fee you will need to pay. It can be a good option for larger sums like a house deposit.

One of the biggest challenges to any payment platform is for the recipient to be able to access the funds as soon as possible. Most banks and transfer services take up to a few days or you need to pay a fee for same-day transfers. Faster payments remove all of this to access your money as quickly as possible.

You just need to make sure that your bank and the recipient's bank are registered for the faster payments service. After that, all you need is the account number and sort code. You can then send a bank deposit to anyone in the United Kingdom and they can access it instantly.

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