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Faster payments: how do they work?

Faster payments: how do they work?

Category: Banking

Faster payments do what they say on the tin: they're a way to make payments faster. But how fast are they? And how do you go about making one from your bank account?

Using faster payments can mean the difference between paying or missing that red bill, or getting your cash-strapped child at university some much-needed rent money before they plunge into their overdraft again. Faster payments mean that the agonising waiting period added to payment transfers is cut – giving you and those you are paying some extra peace of mind.

How do faster payments work?

The Faster Payments Service allows customers of certain banks or building societies to make quicker electronic payments or transfers over the phone or online./p>

Funds can be transferred and accessed within a couple of hours instead of days, while standing orders can be set up in a single day.

Banks and building societies operating the Faster Payments Service can process payments and transfers 24 hours a day, any day of the week. This includes weekends and Bank Holidays.

Four things to check when making a faster payment

There are four things you need to check before you can make a faster payment:

  • Does your current account provider take part in the Faster Payments Service? Not all banks and building societies do. Find out here if your provider is a participant in the scheme.
  • Find out if there are any transaction or daily value limits on how much money your can transfer via the Faster Payments Service. If the amount exceeds your provider's value limit, your payment may be rejected
  • If you are paying a bill, check that the company you are paying accepts faster payments (you should be able to find this information on the reverse of a utility bill for instance, or by calling them).
  • If you're making a payment to a person, check that their bank or building society will accept faster payments.

Looking for a new current account? Find the best bank account for you by comparing bank accounts bank accounts

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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