Who will use the Faster Payments Service?
Potential users of the Faster Payments Service are divided into two main categories:
- Indirect users:
This includes personal and business customers, as well as financial institutions who do not connect directly to the Faster Payments Service infrastructure, but who make faster payments via their bank.
- Participants:
There will be a number of distinct types of participant in the Faster Payments Service:
In the future, in addition to the founder member banks and building societies who will be rolling out the new service from May 27th 2008, it will be possible for other institutions to become participants in the Faster Payments Service, either as agencies, third-party beneficiaries or as corporates. Some other financial institutions may also become full members. All these participants will be able to submit payments into the Faster Payments Service, either singly and/or in bulk files, depending on what type of participant they are, using their own direct connection to the service.
Members
Faster Payments Service membership is open to credit institutions with a settlement account at the Bank of England, and who can connect their payment system to the central infrastructure 24 hours a day, 7 days a week. Members can send and receive all types of payments processed through the system, although they will decide which payments are provided to their customers.
Members are responsible for settlement of funds through the Bank of England and can sponsor other participants into the service that do not wish to have settlement commitments for the Faster Payments Service. Members are responsible for the settlement of all payments submitted by participants that they sponsor.
Agencies
As with other UK payment systems, financial institutions who do not want or need to be full members of the Faster Payments Service can choose to become agency participants. Agencies will be able to send and receive all types of payments processed through the service in the same way as a member, but they must be sponsored by one or more members who will provide inter-bank settlement facilities for those payments made and accepted by the agency. This part of the service will not become available until after the launch of the new infrastructure.
Third-party beneficiaries
Future developments are planned to allow companies such as credit card issuers to connect to the Faster Payments Service, in order to be able to receive information regarding payments directly, rather than having them sent via their bank. Third-party beneficiaries must be sponsored by one or more members who will provide inter-bank settlement facilities for those payments accepted by the third-party beneficiary. Currently, about half of all the bill payments that customers make over the phone or by banking online are to pay their credit card bill.
Corporates
Following the launch of the central infrastructure on May 27th 2008, there are plans in place to enable corporates, such as those paying a large number of employee expenses, to submit files of payments directly into the system in much the same way as they do through Bacs. These corporates will need to be sponsored by a bank that is already either a member or an agency within the Faster Payments Service.
