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Faster Payments (FPS)

Faster Payments (FPS) enables payments to be made in real time.<br/><br/>

What it is and what it does:<br/><br/>

• FPS is a functionally rich, real time system, 24/7;<br/>
• Real time confirmation to sender, and immediate funds availability;<br/>
• It supports three types of credit transfers: single immediate payments, forward dated payments, and standing order payments.<br/><br/>

Operational details:<br/><br/>

The Faster Payments Service (FPS) is the UK’s low-value real time system and is one of the richest systems of its type in the world. The rules for the system are set by Faster Payments Scheme Ltd. Posting occurs in near real time. For some indirect participants, however, posting is slower. Each participant’s net settlement totals are forwarded to the Bank of England for settlement three times per day (Monday – Friday, except bank holidays).<br/><br/>

FPS Use Cases<br/><br/>

FPS is used for time sensitive low-value payments up to £250K:<br/><br/>

• Online banking and mobile payments<br/>
• Bill payments<br/>
• Forward dated payments<br/>
• Standing orders (recurring payments)<br/>
• Person to Person, Person to Business, Business to Business<br/>
& Business to Person transactions<br/><br/>

There are three access models to join FPS:<br/><br/>

Direct Settling Participant<br/><br/>

• Bank of England settlement account is mandatory<br/>
• Direct technical connection to the FPS Central Infrastructure<br/>
• Mandatory to receive payments 24/7<br/>
• Liquidity and risk management tools required<br/><br/>

Direct Non-Settling Participant<br/><br/>

• Bank of England settlement account is not required - settlement provided by the Direct Settling Participant<br/>
• Direct technical connection to the FPS Central Infrastructure<br/>
• Mandatory to receive payments 24/7<br/><br/>

Indirect Participant<br/><br/>

• Bank of England settlement account is not required - settlement provided by the Direct Settling Participant<br/>
• No direct technical connection to the FPS Central Infrastructure – the technical connectivity is between yourself and your Sponsor Bank<br/>
• Fully reliant on the Faster Payment service offering of your Sponsor Bank<br/>
• Not mandatory to receive or send Faster Payments 24/7<br/><br/>

Cost considerations for joining scheme<br/><br/>

Higher<br/><br/>

• Technology build<br/>
• Operational costs<br/>
• Assurance costs<br/><br/>

Medium<br/><br/>

• External fees<br/>
• Connectivity cost<br/>
• Security e.g. PKI and HSM<br/>
• Transaction costs<br/><br/>

Lower<br/><br/>

• Liquidity costs<br/>
• Scheme membership<br/>
• Settlement account cost<br/><br/>

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