Cheques are history

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

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