Introduction
Throughout history, payment methods have evolved however the emergence of FPS (Faster Payment Services) in 2008 continues to hold great significance. Faster Payment services essentially enable people in the UK to send electronic payments no matter the amount. In this week’s blog post, we look at how crucial they are in today’s society.
Cost effective
One of the main advantages of faster payment services (FPS) is the fact that it has low set-up costs which is an advantage for all parties involved. With payment providers being able to operate this service at a reduced fee, it allows them to then have lower payment processing costs which can be beneficial when it comes to lower value transactions. However a downside to this is that some banks require businesses to meet a certain checklist in order to use Faster Payment Services which can therefore prolong the whole process.
Greater employment opportunities
With the way times are changing, there has been an increase in freelance jobs such as UberEats and deliveroo and these jobs require their employees to be paid right away. For services like these, faster payment services prove to be extremely useful as not only does it enable these companies to pay their employees in a timely manner but also provides them with a fast and secure transaction service. As a result, their payments have increased security measures such as two factor authentication, reducing the risk of any fraudulent activity.
Efficiency
Another key advantage of faster payment services is that they are easy to manage due to their increased efficiency unlike other payment methods such as BACS (Bankers Automated Clearing System) or CHAPS (The Clearing House Automated Payment System) which generally take a longer time for transactions to come through. This mainly comes down to the fact that FPS allows a much better cash flow as it is a real time transaction and people would be able to access their funds immediately. Whilst this is definitely an advantage, the only setback is that faster payment services have limits to their transactions ( the current limit being at £1m) which can be an inconvenience for big company transactions.
Conclusion
From looking into the various aspects of faster payment services (FPS), it is clear that it is greatly significant especially within today’s society. Although it can be limiting for big time transactions and has a criteria in order for businesses to use it, faster payment services (FPS) are secure, efficient and flexible and seem to serve a wider employment community. Ultimately it is no doubt that they are set to evolve and become even more efficient in the future.
