In this guide, we explore the details of Faster Payments and how are they used in business and for payroll payments.
To learn more about the differences between other payment methods read our CHAPS, BACS & Faster Payments guide.
What are Faster Payments?
Faster Payments is a payment service enabling companies and individuals to make money transfers from one bank account to another, almost immediately.
What is the Faster Payments Service (FPS)
The Faster Payments Service (FPS) is a way to send electronic payments in pound sterling (£) within the UK. As long as the receiving bank or building society uses Faster Payments too, and the amount is within the limit, then the payment will arrive almost immediately (though sometimes, it can take up to 2 hours).
Can Faster Payments be used for payroll?
Yes! Payroll payments are traditionally made using BACS, however platforms like IGsend enable bulk payroll payments to be made instantly using Faster Payments. For employers looking to optimise their payroll process, Faster Payments offer an opportunity to save valuable time and money. Learn more.
What does Faster Payment mean on payslip?
This is the means in which the payroll payment has been made to the employee. The most common methods are BACS, CHAPS or Faster Payment.
Is Faster Payments the same as BACS?
No – Faster Payments are processed immediately whereas BACS take 3 days.
Learn more about the differences between BACS, CHAPS and Faster Payments and how to choose a payroll solution that suits both your business and your employees in our blog.
Can Faster Payments take longer than 2 hours?
Unless there has been a problem, Faster Payments should not take longer than 2 hours. As long as the receiving bank or building society uses Faster Payments too, the payment will arrive almost immediately (though sometimes, it can take up to 2 hours, but not any longer).
Which banks use Faster Payments?
Most UK banks can accept and receive Faster Payments.
Our partner Starling Bank’s handy sort code checker can easily verify if a bank can receive Faster Payments.
What is the limit for Faster Payments?
£1,000,000 is the transaction limit for Faster Payments. The Faster Payment System transaction limit increased from £250,000 to £1 million in February 2022.
How long do Faster Payments take?
As long as both the sending and receiving bank or building society use Faster Payments, the payment will arrive immediately (though sometimes, it can take up to 2 hours).
Why has my Faster Payment not arrived?
If for some reason a Faster Payment has not arrived, it may mean that the recipient’s sort code or account number has been entered incorrectly, or the account may be closed. You will need to check with the recipient if their details are correct before you are able to make a payment. If an account does not exist, the payment can’t be made.
Fortunately, when sending payroll payments via IGsend, any incorrect sort code or account numbers can quickly and easily be amended within the platform before funds leave the account.
Do Faster Payments work on weekends?
Yes! Weekends, bank holidays…even Christmas Day! Faster Payments can be made and received 24 hours a day, 365 days a year.
Are Faster Payments reliable?
BACS payments usually require manual spreadsheet uploads – and this manual input increases the risk of human error. A misplaced BACS file will need to be rectified so the employee is not left out of pocket, usually via a costly CHAPS payment.
Faster Payments are transferred very quickly, but in IGsend, no funds leave your account if there are errors in the recipients account details. These can be easily fixed so you can be sure all funds are transferred successfully and reliably.
Do Faster Payments clear on weekends?
Faster Payments can be made 24/7, 365 so yes they clear on weekends.
Do Faster Payments work at night?
Faster Payments can be made 24/7, 365 so yes they clear at night. If a payment is scheduled using IGsend, it will be paid at 00:01 on the day requested.
Do Faster Payments clear on a Sunday?
Faster payments can be made 24/7, 365 so yes they clear on Sundays. If a payment is scheduled using IGsend, it will be paid at 00:01 on the day requested – even if it is a Sunday.
What are the benefits of Faster Payments?
Real-time or Faster Payments can be made, settled, and cleared within seconds.
They can be processed 24 hours a day, seven days per week, 365 days a year. They are always online and always available to transfer, even if it’s a bank holiday, a Sunday or even 9pm on Christmas Eve!
You can see all the benefits of Faster Payments in our blog.
What are the disadvantages of Faster Payments?
One downside is that once sent, Faster Payments cannot be cancelled or traced – even if you realise you’ve paid the wrong person. IGsend has measures to prevents this. If any payee bank account details are incorrect, you’ll receive a notification and the payment will not be processed until the details have been corrected.
Do banks charge for Faster Payments?
Faster Payments is traditionally seen as one of, if not the most expensive way to make bank payments. Most high street banks charge around £2.50 per transaction, which if making multiple payments, can become very expensive. However, with IGsend, Faster Payments cost just £0.20 per transaction – which works out cheaper than BACS!