Did you celebrate D (+1) Day?

[Dave Birch] You may have missed D-Day (or D+1 day, as it was more properly labelled). From 1st January 2012 electronic payments are officially D+1 (instead of the previous D+3ish). So electronic payments from one UK bank account to another have to be completed in a day.

From January 1, when the changes come into effect, more than 15m payments a month are expected to be rerouted through faster payments, reaching the recipient’s account in one working day.

The new timescale, known as D+1, is part of European wide legislation introduced more than two years ago to harmonise payment services across the region, making cross-border payments easier.

[From Bank transfers cut to one day – FT.com]

In the UK, these D+1 payments are executed through the Faster Payments Service (FPS). FPS has actually be around for a while, and it was successful from the very beginning. After only six months or so,

Two thirds of all phone and internet payments are now processed through the FPS [From The Paypers. Insights in payments.]

It spread steadily and, although there were issues, soon began to dominate volume. For a typical consumer, such as myself, being able to log in and send money – effectively instantly – to (to pick a few examples from the last month) tennis coaches, nieces, sons and builders is a terrific boon. And, in practical use, easily more convenient than finding a cheque book and writing a cheque. I had to send one of my friends £25 at the weekend. Since I’d logged in to internet banking to pay a couple of bills, I just texted him for his sort code and account number and then it took two minutes to add him as a payee and send him the money.

Most big British banks already allow current account customers to use the UK ‘Faster Payments’ system, in which transfers are completed in seconds… At present, just over 80 per cent of payments in the UK are made this way, the Payments Council says.

[From Banks forced to guarantee ‘next-day’ internet and phone cash transfers from 2012 | This is Money]

Rather spookily, I remember reading that specific article in a waiting room at the Payments Council before a meeting and I remember noting how FPS was continuing to grow. Never mind the last couple of weeks. I’ve used it goodness knows how many times over the last couple of years and as far as I can tell most payments get there within a few minutes let alone a day. This is why the idea of a mobile “front-end” to FPS — whereby FPS transfers are instructed through a mobile “layer” that links bank accounts numbers to mobile phone numbers — is seen by many people as being an extremely attractive alternative to cheques in the UK.

Where are the mobile macro payments? I am talking about the payments with a higher amount than the ones that are defined as micropayments.

[From Where are the mobile macro payments? | in2payments]

This is a question many people have been asking in the UK. So I thought it would be useful just flag up what has been happening. Consult Hyperion are one of the associate members of the Payments Council and we have a great, shared interest in seeing new technologies exploited by the Council’s members in effective and efficient ways.

The Payments Council today announced that Allied Irish Bank Group (UK), ING Direct and G4S Cash Services are to become full members of the Council, along with Consult Hyperion… This now brings total membership to 28 members and 11 associate members.

[From Payments Council – Payments Council welcomes three new members]

The Council has been looking at the issue of mobile payments for some years, and last year it decided to set up a project to move the industry along.

In May 2011, the Payments Council announced an industry-wide project to help participating banks and building societies deliver mobile payments in the UK. Within as little as a couple of years customers may be able to send money using only their mobile phone: either by using text, an app, or their phone’s internet browser.

[From Payments Council – Mobile Payments]

This is what they are talking about in the just released UK Cards Association annual report for 2012 where they say that over the last year they have sought to

Facilitate the development of technological platforms to support the deployment of contactless and mobile contactless payments and create dialogue between the payments industry, retailers and other technology companies with an interest in these developments;

Last year, the UK Cards Association (UKCA) commissioned Consult Hyperion to assist them in establishing the Mobile Contactless Steering Group and we have been working with UKCA since then to help the members get together and work out the best way forward. I don’t want to comment on what products and services might be coming to the market soon, but what i will say is that FPS gives UK players and excellent base to build on. While D+1 rather than mobile was the original motivation, I would not be at all surprised to see that in a relatively short time, a few years from now, mobile-instruction credit transfers will dominate the FPS volume and will be taken for granted by consumers. A quick NFC tap or barcode scan will acquire the destination bank details (with a proper implementation of digital signatures, naturally) and a couple of buttons will send the money. Easy.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers


These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

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