Behind the scenes of the Faster Payments Service
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Phone and internet payments - these operate 24/7 On average, 60% of daily phone and internet payments are classified as spontaneous, i.e. made that day, whilst the remaining 40% have been set up by a customer in advance, to pay bills or transfer money between accounts that day. The Faster Payments Scheme does not oblige participating banks to send these payments within any specific time slot so they can be processed continually throughout the day’s cycle. There is, however, a requirement to credit a recipient’s account within two hours of the payment being sent. |
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Settlement Settlement is the process where participating banks’ accounts at the Bank of England are credited and debited for the value of the payments made. There are three settlement periods which only operate on bank working days. Values settled at the beginning of each cycle are likely to decrease as the day goes on. The first settlement, at 07.15 hours, coincides with the start of the Bank of England’s working day and is after the vast majority of standing order payments have been processed. The final settlement, at 15.45 hours, coincides with the end of the traditional bank working day and at the same time as CHAPS and CREST stop their daily payment operations. On non-bank working days, internet and phone payments can still be made by customers but settlement is held over until the next working day. |
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Standing orders The Faster Payments Scheme requires that 90% of any day’s standing order traffic is sent through the central infrastructure between 00.01 and 06.00 hours. The remaining 10%, along with any new standing orders set up that day, need to be cleared 15 minutes before the last settlement period of the bank working day; therefore by 15.30 hours. Standing orders can only be set up by customers to be processed on bank working days. |
