What is the Faster Payment System (FPS)?
The Faster Payment System (FPS) is the UK's primary near-instant payment system, enabling bank-to-bank transfers to settle within seconds, around the clock, every day of the year. It is available to virtually anyone with a UK bank account and handles the majority of online, mobile, and telephone banking payments in the UK. In 2024, FPS processed 5.09 billion transactions worth £4.2 trillion, according to Pay.UK.
FPS was launched on 27 May 2008 to replace a landscape where most domestic bank transfers took three business days via BACS. It is operated by Pay.UK and runs on infrastructure provided by Vocalink, a Mastercard company. The transaction limit is £1 million per payment, raised from £250,000 in February 2022. Payments above £1 million must use CHAPS.
How Faster Payments works
A Faster Payment is initiated by the sender through their online banking portal, mobile app, or telephone banking. The sender provides the recipient's sort code and account number, the payment amount, and an optional reference. From there, the process works as follows:
- The sending bank formats the payment message and transmits it through the FPS central infrastructure
- FPS validates the message and routes it to the receiving bank
- The receiving bank credits the recipient's account and sends a confirmation back through the network
- The sender's bank notifies the sender that the payment has been processed
For most payments between direct participants, steps 1 through 4 complete within seconds. Payments can occasionally take up to two hours if fraud checks are triggered or one party uses indirect access. FPS guarantees funds will arrive by the end of the following business day at the latest.
Faster Payments are irrevocable once sent. There is no mechanism to reverse a completed transaction. Recovery of misdirected or fraudulently obtained payments depends on cooperation between the two banks involved.
Four types of Faster Payments
FPS supports four distinct payment types, each serving a different use case:
- Single Immediate Payments (SIPs): The most common type. A one-off payment initiated and settled in near real time via online or mobile banking
- Forward-dated payments: One-off payments set up in advance for a specified future date
- Standing orders: Recurring fixed-amount payments that move automatically on a regular schedule, such as monthly rent
- Direct corporate access payments: Bulk files of payment instructions submitted directly to the FPS infrastructure, used for high-volume payroll runs, supplier payments, and mass disbursements
Confirmation of Payee
Confirmation of Payee (CoP) is a name-checking service mandatory for all FPS direct participants since 2020. Before a payment is sent, the sender's bank checks the account name provided against the name held by the receiving bank. CoP returns a match, a close match, or no match. It does not block the payment but warns the sender if the name does not match the account details.
CoP significantly reduces misdirected payments and is one of the primary defences against authorised push payment (APP) fraud, where a fraudster tricks a sender into paying a fraudulent account.
APP fraud reimbursement
From October 2024, the Payment Systems Regulator introduced mandatory APP fraud reimbursement for FPS under Specific Direction 20. Payment service providers that are FPS participants must reimburse victims of APP fraud up to £85,000 per claim, unless the victim acted with gross negligence. Liability is split 50/50 between the sending and receiving PSP under the default rules.
This has direct operational implications for any payment service provider participating in FPS. Fraud monitoring, CoP implementation, and customer communication processes all need to meet the PSR's requirements, since liability can attach to both ends of the transaction.
Direct and indirect access
Not all UK financial institutions connect to FPS directly. Access works at two levels.
Direct participants connect to the FPS central infrastructure and settle funds across accounts held at the Bank of England. As of May 2025 there are 46 direct participants, including major banks, challenger banks, and non-bank PSPs. Wise became the first non-bank direct participant in 2018 following rule changes allowing non-banks to hold settlement accounts at the Bank of England.
Indirect participants access FPS through a sponsor bank or direct participant. Most smaller building societies and newer fintechs route payments this way until they obtain direct access.
FPS vs. BACS vs. CHAPS
FPS is one of three main domestic interbank payment systems in the UK. Each serves a different part of the payment landscape. CHAPS operates on a real-time gross settlement basis for high-value payments above £1 million. BACS handles scheduled and recurring payments on a three-day cycle.
FPS and payment operations
For fintechs and platforms processing UK payments, FPS is the primary inbound and outbound rail for GBP transfers. Its 24/7 availability and near-instant settlement make it well suited to consumer-facing products, marketplace payouts, and any use case where payment speed affects user experience.
Virtual accounts and virtual IBANs assigned UK sort codes can receive Faster Payments in the same way as standard bank accounts, allowing platforms to collect from UK payers without maintaining a separate bank account for each client. The irrevocable nature of FPS payments means payment reconciliation needs to handle all inbound credits promptly, as there is no settlement window during which a payment can be recalled.
