Faster Payments volumes rise again

Issue 273 | 23 February 2022

In this edition of Payments:Unpacked Tracker we unpack the latest volumes and values of payments processed in the UK through the Bacs, CHAPS, Faster Payments, Cheque and Debit / Credit Card schemes.

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January 2022

In this second round up of retail payments in 2022, we see the impact on the volume and value of payments processed in the UK now Covid restrictions are easing, compared to Lockdown 3.0 conditions in 2021.

Note: All data is publicly sourced and is the latest available: Pay.UK January 2022, Link February 2022 and UK Finance November 2021.

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Source:Pay.UK Limited

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Bacs Direct Debit and Direct Credit

In the 12 months to the end of January 2022 we see that:

• Bacs Direct Credit volumes were unchanged (12 months to December decreased by 1%)

• Bacs Direct Debit volumes have increased by 3% (12 months to December increased by 2%)

• Total Bacs volumes have increased by 2% (12 months to December increased by 1%)

• Bacs Direct Credit values have increased by 3% (12 months to December increased by 4%)

• Bacs Direct Debit values have increased by 8% (12 months to December increased by 6%)

• Total Bacs values have increased by 4% (12 months to December increased by 4%).

Volumes for Bacs Direct Credits in January 2022 fell back by just 0.1% when compared with January 2021, as restrictions eased, contributing to the year on year volumes being unchanged when compared with the 12 months ending January 2021.

The growth in Direct Debit volumes year on year has now seen an increase to 3% for the 12 months to January 2022 when compared with the 12 months to January 2021. As Direct Debits account for 70% of Bacs payment volumes, this has helped to increase the growth seen over the year back to 2% for the 12 months to January 2022.

Month on month values have again decreased with January 2022 values 5% below January 2021. Year on year growth had been increasing each month but with monthly values reducing the increase has now begun to flatten falling back to 3% for the 12 months ending January 2022. Total Bacs values for January 2022 were also lower than January 2021 but overall growth has remained at 4% for Total Bacs values for the 12 months ending January 2022.

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CHAPS

In the 12 months to the end of January 2022 we see that:

• CHAPS volumes have increased by 10% (12 months to December increased by 8%) 

This was made up of a 12% increase in retail / commercial based payments and a 5% increase in financial institution payments, compared to 9% increase and 3% increase respectively for the 12 months to December.

• CHAPS values have decreased by 6% (12 months to December decreased by 6%)

This month the change was made up of an 4% decrease in retail / commercial based payments and a 7% decrease in financial institution based payments, compared to 5% decrease and 6% decrease respectively for the 12 months to December.

Retail / Commercial payment activity had fallen throughout 2020 recovering for just December before falling back again in January 2021. Volumes have since recovered and January continued this trend with the volumes increasing by 10% in January 2022, compared with January 2021. Values also recovered increasing by 10% in January 2022, compared with January 2021. This is not unsurprising given the restrictions in place during January 2021.

The underlying resilience in Wholesale payment volumes has continued although with values decreasing month on month. Values for January 2022 compared with January 2021 had decreased by 2% contributing to the further year on year fall in values by 7% for the year ending January 2022.

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Faster Payments

In the 12 months to the end of January 2022 we see that:

• Single Immediate Payment volumes have increased by 23% (12 months to December 22%)

• Total Faster Payment volumes have increased by 22% (12 months to December 20%)

• Single Immediate Payment values have increased by 27% (12 months to December 25%)

• Total Faster Payment values have increased by 26% (12 months to December 24%)

Thus, the trend has continued in December with both volumes and values significantly ahead of 2021 levels. January 2022 saw an increase of 29% in the volume of Single Immediate Payments processed in the month compared to 2021 and 26% in the value of Single Immediate Payments.

The widespread use of faster payments is a digital payment habit that will be here to stay, reinforced throughout each lockdown and with volumes and values increasing each time restrictions have eased. In the first 3 months of 2022 we would expect to see increasing growth given the differing conditions in place with the trajectory flattening as conditions across both years become more in line.