Faster Payments (FPS) is an electronic money transfer service that lets you send funds with lightning speed between banks, digital payments providers, and crypto exchanges.
But how does it work? And how does it stack up against other bank transfer methods in the UK?
In this guide to all things Faster Payments, I’m going to go through everything you need to know.
Let’s get to it!
What Is Faster Payments (FPS)?
Faster Payments (FPS) is a service that lets you send money electronically between different bank accounts in the United Kingdom. It offers an alternative to more traditional bank transfer methods – such as BACS, CHAPS, and SWIFT – which tend to be slow, expensive, and full of red tape.
The Faster Payments service started in 2008 as an initiative from Pay.UK, which also happens to be the company that manages BACS transfers. Pay.UK bills itself as the UK’s “leading retail payments authority”. Its primary task is to help facilitate bank transfers for both individuals and institutions so that everyone gets their money as fast as possible.
Pay.UK isn’t a bank, though. Instead, it’s an organisation that facilitates bank transfers through the Faster Payments network.
There are more than 40 banks and financial institutions that are part of the FPS network. Most of these FPS network members are UK banks, like Barclays and Royal Bank of Scotland. But there are other institutions in the network, too, like Wise (formerly Transferwise) and Revolut.
What Are the Different Types of Faster Payments (FPS)?
The phrase “Faster Payments” is an umbrella term for a few different types of transfers that can be made through the FPS network.
There are currently 4 types of Faster Payments (FPS):
- Single Immediate Payments: A one-off payment between two banks that executes immediately. Can be made online, over the phone, or in-person at a bank branch. This is what most people envision when they think about FPS payments.
- Forward-Dated Payments: One-off payments that are set up in advance for a specific date and time. For example, you can pre-schedule an FPS transfer for a certain day to pay a bill.
- Standing Orders: Repeat payments via FPS that send a fixed amount of money to a recipient. These are helpful for paying rent on a certain day each month, but they normally can only be sent on business days.
- Direct Corporate Access Payments: Available only for corporate clients, these payments let businesses send bulk payments through FPS. This is used primarily to pay a large number of invoices at the same time.
What Are the Benefits of Faster Payments (FPS)?
The 4 biggest advantages of Faster Payments (FPS) are:
- Speed: As its name suggests, Faster Payments (FPS) is fast. Most FPS transactions settle in seconds (though it can sometimes take up to 2 hours for a transfer to process).
- Cost Efficiency: Most banks waive the fee for FPS transfers. If you do have to pay a fee, it’s normally quite small.
- Decent Transaction Limits: The FPS network imposes a £250,000 limit on a single transaction, though your bank may have a lower limit.
- 24/7 Service: FPS transfers can be sent at any time of day (even outside of regular banking hours).
What Are the Drawbacks of Faster Payments (FPS)?
Although Faster Payments (FPS) is a convenient way to send money, there are drawbacks to using the service.
- Irreversible Transactions: Since FPS transfers settle almost immediately, there’s no way to reverse a payment if you make a mistake. To be fair, many other electronic payment methods are irreversible, too. But it’s important to know what you’re getting into before you send money via FPS.
- Limit Restrictions: Even though the FPS network has a £250,000 limit per transfer, some banks have much lower daily and individual transaction limits. For example, HSBC only lets you send £25,000 per transaction with FPS. You can usually send much more using CHAPS or SWIFT.
- Lacks International Payment Support: Faster Payments is primarily designed for domestic UK bank transfers – not international payments. You can technically use FPS for international transfers if you go through a service like Wise (formerly Transferwise), but SWIFT is often better for overseas transactions.
How Do I Know If I Have Faster Payments (FPS)?
Not sure that your bank has FPS?
Most popular high street banks and payment providers in the UK support Faster Payments (FPS).
If you want to double-check, input the sort code of your bank account into this sort code checker tool. This will tell you if your bank/payment providers support Faster Payments (FPS).
Alternatively, check out the transfer options in your online banking dashboard or contact your bank directly for more information.
Bank transfers via Faster Payments (FPS) are available at nearly any UK bank. But they’re faster and more efficient at banks and financial institutions within the FPS network.
You can check the list of FPS network members to see if your bank offers this service. Some of the biggest banks and financial institutions in the FPS network include:
- Bank of Scotland
- Citi Bank
- Clydesdale Bank
- The Co-Operative Bank
- Danske Bank
- JP Morgan
- M&S Bank
- Royal Bank of Scotland
- Tesco Bank
- Ulster Bank
Keep in mind that pretty much any bank account in the UK can receive Faster Payments (FPS) – with the exception of a few savings accounts. But if a bank isn’t a direct participant in the network, it might take up to 2 hours for the payment to reach its destination. This is because the money has to get routed through a sponsor institution before it reaches the recipient.
Some banks in the UK can also send Faster Payments without being part of the network by using a sponsor. For example, Starling Bank let its account holders send FPS transfers for years before it fully joined the network. By joining the network, banks like Starling can make FPS transfers even faster and more efficient.
Faster Payments (FPS) Fees & Limits
The Faster Payments (FPS) network has a maximum transaction limit of £250,000.
However, each bank that processes FPS transactions has its own limits. Some banks set much lower limits (e.g., £10,000) for the amount that can be sent in a single transaction. Always check ahead on the bank’s website or get them on the phone before you send large amounts of money via FPS.
If you need to send more money between UK banks than the FPS limits allow, consider using an alternative bank transfer method (like CHAPS).
As far as fees go, there are technically fees for using FPS. However, most banks waive these fees for personal banking customers. If you do need to pay, it’s normally very small (but double-check these fees before you process an FPS transfer).
Other UK Bank Transfer Methods
The UK has a number of bank transfer services, each of which is designed for a specific type of transaction.
In addition to Faster Payments, the 3 other types of bank transfers that you’ll find in the UK include:
- BACS: Formerly known as the Bankers’ Automated Clearing System, BACS is one of the oldest electronic payment methods in the UK. It’s primarily used to process direct debits, such as for your mobile phone bill. Many companies also use it to send salaries to employees. However, it’s much slower than FPS. Plus, BACS transfers may incur a small fee (think £1 or less) unless waived by your bank.
- CHAPS: CHAPS, or the Clearing House Automated Payment System, is a money transfer service for UK banks. It is managed by the Bank of England and it provides quick settlement for high-value payments (such as a deposit on a home). Fees are higher for CHAPS than for FPS, but there’s technically no limit on how much you can send. Most CHAPS payments process within minutes when sent during working hours.
- SWIFT: Ideal for international bank transfers, SWIFT is the go-to option for sending money around the world. Most banks that process international money transfers do so through SWIFT. The process is slow and expensive, but it’s a popular choice when sending large amounts of money to foreign bank accounts.
Figuring out which of these UK bank transfer methods to use can be complicated. Most people find that it’s easiest to use FPS for smaller transactions between UK bank accounts but there are times where you may need to use BACS, CHAPS, or SWIFT.
Here’s a table that outlines the major differences between each bank transfer method:
|Primary Purpose||Quick transfers between UK bank accounts, payment providers, and crypto exchanges.||Non-time sensitive direct debits and salaries to UK bank accounts.||Fast settlement of high-value transactions in the UK above the FPS limits.||International payments and commercial transactions.|
|Processing Time||Instant (up to 2 hours)||2 to 3 working days||Instant (up to 1 working day)||3 to 5 working days|
|Fees||Free*||Free*||£25||£25 to £40|
|Network Limits||Up to £250,000||None||None||None|
*Both FPS and BACS transfers tend to be free. Most FPS fees are waived by banks for personal transactions. If you have to pay a BACS fee, it’s usually just a few pounds or less.
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Faster Payments FAQs
What are Faster Payments used for?
Faster Payments (FPS) are used to send money between bank accounts. It offers a fast, affordable, and convenient way to transfer money at any time of day or night. Faster Payments is primarily available for UK bank accounts and it is one of the most popular ways to send funds online.
Are Faster Payments Free?
Technically, Faster Payments is not free. However, nearly every bank waives the fee for personal bank transfers. You will rarely—if ever—have to pay to send bank transfers via FPS. One exception is if you’re transferring money to or from a crypto exchange that charges deposit and withdrawal fees. However, these fees are set by the exchange, not the FPS network.
Is Faster Payments the same as BACS?
Faster Payments is not the same as BACS. While they are both managed by the same organisation (Pay.UK), BACS is primarily for direct debits and salary payments between UK bank accounts. It is normally slower and more expensive than Faster Payments, which is generally used for quick UK money transfers.
Is Faster Payments safe?
Faster Payments is a safe and convenient way to send money in the UK. It’s offered by almost every major UK bank and the Faster Payments network has strong anti-fraud protections in place. However, transfers sent via Faster Payments are irreversible, so always double-check your transfer details before you send anyone money.
How can I get Faster Payments?
If you have a UK bank account, you probably already have Faster Payments (FPS). Nearly every UK bank account (except a few savings accounts) supports FPS transfers. You can check if your bank supports FPS by looking up your sort code. If your bank doesn’t allow FPS, you need to make an account with a UK bank that does or use a different transfer method.