Faster payments celebrates 10th anniversary
The growth of round the clock, real-time payments is set to continue, according to a new report published the 25 May 2018 by Faster Payments to mark the tenth anniversary of 24/7 real-time payments in the UK.
The UK was one of the first countries in the world to launch a 24/7 real-time payments system, when the Faster Payments service went live on Tuesday 27 May 2008. Today, more than 230,000 Faster Payments are sent every hour, on average. By contrast, in its first five days of operation in May 2008, just 334,000 Faster Payments were processed – fewer than 3,000 per hour.
Changing consumer behaviour has driven changes such as the growth of internet and mobile banking, making the convenience of 24/7 instant payments part of everyday life in the UK. The white paper published today, A Decade of Faster Payments, sets out the impact of real-time payments over the past ten years, alongside predictions that suggest the rate of growth could increase still further in the future.
Co-authors of the report, strategic consultancy Hunch, identified four key trends they believe will drive the evolving market for payments:
• The growth of the ‘Economy of Things’ – payments triggered by smart devices connected to the ‘Internet of Things’ – means payments are set to change as much in the next ten years as they have in the last 20.
• New economic models such as local electricity grids and subscription services for high-value products, such as cars, will become commonplace.
• Payments are set to rise in volume and shrink in average value as costs fall, with permission-based machine-to-machine payments representing many daily transactions – particularly in business-to-business supply chains.
• Real-time payments and advances in access and security across payment systems will be key factors in making these changes possible.
John Jefferson, general manager of Faster Payments, said:
“The convenience and simplicity of being able to send a near instant payment 24 hours a day, seven days a week has seen the popularity of Faster Payments soar in the ten years since it launched.
“We are proud to have kept our service available around the clock since 2008, and look forward to meeting the predicted growing demand from consumers and businesses for the next decade and beyond.”
Philip Clarke, founding partner of Hunch, said:
“The future of real-time payments will let your fridge order and pay for your weekly essentials when they run out, and your home sell energy back to the grid when you’re not in. This ‘economy of things’ will transform the commercial landscape with new behaviours, new expectations and new business models that change the way we buy, provision and use an emerging generation of products and services.
“Monetising these opportunities will require increasingly open access to high-volume, high-resilience real-time payment services. Having pioneered and scaled Faster Payments, the UK’s payments industry must now look forward to a brave and bold second act – building on its success to enable a new wave of disruptive businesses.”
Since 1 May 2018, Faster Payments Scheme Limited (FPSL) has been part of the New Payment System Operator (NPSO), the company established to consolidate the UK’s retail payment schemes. One of the NPSO’s key tasks is to develop a New Payments Architecture – a completely new conceptual model for retail payment delivery in the UK.
Matthew Hunt, chief operating officer of the NPSO, said:
“At its launch ten years ago, Faster Payments was a ground breaking innovation that gained worldwide respect and admiration. Since then, the Faster Payments team has done a great job in delivering further enhancements.
“Now the time is right for the NPSO to deliver the next step forward for UK retail payments. The expertise amongst the Faster Payments team will play a key role in helping us deliver a New Payments Architecture to enable a vibrant UK economy.”