Faster Payments Scheme Limited (FPSL) announced that the maximum limit per payment under the UK scheme was lifted from £100,000 (US$151,000/€141,000) as of Tuesday November 10 in response to demand from its large corporate users. The increase to the scheme limit is the first since 2010 and users have been promised a further review next year.
“Faster Payments’ status as a world-class service is backed by the strong demand we continue to see amongst consumers, businesses and corporate users,” said its chief executive, Craig Tillotson.
“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.”
Since its launch in 2008, the FPS has signed up 10 direct settling participants: Barclays, Citi, Co-operative Bank, Clydesdale and Yorkshire Banks (National Australia Group), HSBC (including First Direct and M&S Bank), Lloyds Banking Group (including Lloyds Bank, Halifax and Bank of Scotland), Nationwide Building Society, Northern Bank (Danske Bank), Royal Bank of Scotland Group (including NatWest and Ulster Bank) and Santander UK.
PayPal connects to Faster Payments on a direct agency basis, whilst a further 400 payment service providers (PSPs) access the service indirectly through a sponsor bank.
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.
In 2014 more than 1.1bn payment transactions with a total value of £904bn were processed and continued strong growth is expected over the next 10 years. Business-to-business (B2B) payments are forecast to increase from a total of 86m in 2014 to over 300m payments in 2024, driven in part by the opportunity to use Faster Payments for higher value payments.
Faster Payments says that this week’s increase to the scheme limit reflects a recent change in the way participating banks and building societies settle their payments with each other. The ‘pre-funding’ settlement process, introduced in September this year, eliminates shared risk and removes any implicit obligation for smaller participants to underwrite a share of larger participants’ transactions.
Jan Gonnissen, senior payments consultant for the transaction banking platform iGTB commented: “Whereas the FPS was originally launched to facilitate mainly retail payments, many businesses and corporates alike started to appreciate the system’s benefits of near real-time execution with finality of payment, at a cost well below the price generally charged for CHAPS payments.
“With a daily transaction limit of £250,000, the FPS will likely capture a larger share of payments typically the preserve of the real-time gross settlement (RTGS) bracket.”
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