Adrian Stafford-Jones

This May the UK banking industry will deliver the faster payments initiative, offering business a near ‘real-time’ payment system for sums up to £10,000.

Crucially, this service will be available at a fraction of the cost of CHAPS transactions, which is the current fast payment option.

The UK faster payment service will facilitate almost ‘real time’ payments. Faster payments will reduce transaction costs and allow businesses to take advantage of ‘cash only’ or instant payment offers at the touch of a button.

The money saved in banking costs will be substantial and will free up capital resource across the entire business network. Yet the announcement that this service will shortly become available has prompted modest interest from the UK business community at best.

Indeed, the majority of banks and businesses appear to view faster payments as simply a lower cost alternative to traditional CHAPS transactions.

This attitude completely overlooks the true potential of faster payments to transform day-to-day operations within UK business. The CHAPS replacement market represents only a fraction of the opportunity for faster payments.

Indeed, the potential for huge volumes of faster payment transactions is significant if businesses and banks work together to deliver valuable business and process change.

Across the Channel, European businesses are green with envy that the UK is soon to receive low cost, faster payments.

In the Single Euro Payment Area (SEPA), the European version of the unified payment system that the UK has enjoyed for years via Bacs, many European businesses are now lamenting the fact that, in its initial deployment, SEPA will not include faster payments.

Delays have undoubtedly dented confidence in the banks’ ability to deliver the initiative on time ­ although most organisations still appear confident in the banks’ ability to deliver a robust, secure payments service for making bulk payments via Secure-IP. The question is, when?

Add to this the disinterest of the business world as a whole and the result, when the system is initially made available in May, via internet bank accounts, could be an underwhelming debut of few initial transactions.

But the predicted slow start will soon give way to a rapid uptake. It is essential that UK businesses grasp the opportunity offered by faster payments, especially in an economic climate that is putting ever increasing pressure on profit margins.

Adrian Stafford-Jones, managing director, Albany Software