Sending money locally and globally has become easier and faster. Among the methods that have been used to facilitate millions of transactions around the world is Faster Payments, a fast and convenient way to send money in the UK.
What are Faster Payments?
Faster Payments is one of the ways you can send money electronically in the UK. It’s a real-time payment system, meaning that any money sent through the service is received near real-time.
The service was launched in 2008 to help enable mobile internet, telephone, and standing order payments to move quickly and securely between UK bank account 24 hours a day.
Before the service, moving money between bank accounts would take about three days. The Faster Payments system cut the delivery time to mere seconds.
The FPS system is operated by Pay.UK, the same company that is responsible for facilitating Bacs payments and the Current Account Switch Service and among other financial services in the UK.
Types of Faster Payments
There are four different types of payments that can be processed through Faster Payments. The one you choose depends on your needs and particular requirements. These types of payments include;
Single immediate payments
These are one-off payments that can be initiated using online banking, a mobile device, a telephone or a branch.
Single immediate payments are available 24/7 all year round, and the money is available in the recipient’s account almost immediately. Sometimes, it can take up to two hours, but such instances are isolated. If the receiving bank cannot accept the payment for whatever reason, the customer will be given a response explaining when they can expect the funds to reach the account.
These are payments sent and received on a pre-arranged date. They must be set up beforehand and are typically used to pay bills and other recurrent expenses. This payment type can be initiated using the same methods as single immediate payments and has the same availability.
While this payment can be set up to be paid at weekends and bank holidays, some institutions will only process incoming payments on working days. So, it’s common to have short delays when using this method and when it falls on weekends and public holidays.
It’s impossible to guarantee when the payment will reach the recipient’s account. At least 90% of standing orders are sent by 6 am.
Direct corporate access payments
Direct corporate payments are specifically designed for businesses that need to send payment messages in bulk through the Faster Payment Service. This service is also available 24 hours and delivers the money to the recipient on the same day.
Faster Payment Limits
Building societies and banks use Faster Payments limits to limit the amount of money you can send from your accounts.
The limit reduces the risk of money going to scammers or the wrong account. While using the FPS services, you will find different types of payments for different accounts and payment methods. Knowing the respective limits will help you determine if the FPS method is the best one for you to use when sending money, depending on your requirements and the sums of money you need to send.
Types of Faster Payment Limits
There are two types of Faster Payment limits. It’s important to note that some branches will have a higher limit than others and that there are also general limits that no branch can go above.
This limit varies depending on the branch you visit to make your payment. Most branches limit their payment to £25,000 per transaction with an overall £100,000 daily limit. You must bring proof of ID for these transactions to complete the payment.
If you choose to complete the payment online through Internet banking or the banking app, you can make payments of up to £100,000 per transaction and up to £100,000 daily. Sometimes, the online limit can be reduced to £25,000 if;
- You’re making a payment to an existing payee whom you haven’t paid many times before
- Make a payment to someone you haven’t paid before
- You’re setting up a standing order using our Internet banking or banking app.
These requirements vary depending on the service you’re using. Some branches and banks may have more flexible requirements with a higher limit, allowing you to send more money in the above circumstances.
With most banks, you should be able to check how much you can send to a payee through Internet banking or bank apps when setting up the payment.
Which Payments are Limited?
Payment limits apply to the different types of Faster Payment limits, including:
Payments on the FPS, including most single payments you send online or in the branch, whether immediately or in the future, are subject to the FPS limit. This also includes when you send money to another account you have with another provider.
These are any payments you make to recipients in the same bank. However, the limits don’t apply to transfers to your accounts within the same institution.
An FPS payment limit will also apply when setting up a standing order online or in a branch.
Terms for the Faster Payment Limits
The general Faster Payment limits are as follows;
- £200,000 per day for personal current account payments
- £100,000 per day for personal savings account customers
- £100,000 per transaction for business customers
The Faster Payment limit is cumulative. It includes all amounts authorised on that day, even the payments you set for a future day. You can make multiple Faster Payments in a day, but once you reach the limit, the payments should be made as a CHAPS payment with a fee of £20.00.
If you’re making payments above £20,000, you should know that new daily payment limits might affect your payments.
The overall daily limit for Faster Payments doesn’t apply to;
- Direct debits of BACS payments – This method is usually for businesses. Also, many providers don’t limit your Direct Debits or any other BACS payments.
- International payments like SWIFT or SEPA – There are no limits on how much you can send internationally.
- CHAPS payments – This payment method is preserved for making high-value payments.
- Variable recurring payments – This type of regular or recurring payment used in Open Banking allows you to move money between your own accounts. It’s often used for repaying a loan or an overdraft.
It’s common for providers to apply a lower limit to certain payments to help keep your money safe. You can enquire about the payments where this condition applies to determine if you will be affected.