Faster Payments volumes rise by 20% in 2021

Issue 241 | 22 January 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

In this first round up of retail payments in 2022, with increased Covid restrictions still in place for the period under review, we see the impact on the volume and value of payments processed in the UK as at the end of 2021.

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Source: Pay.UK

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Bacs Direct Debit and Direct Credit

In the 12 months to the end of December 2021 we see that:

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

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

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

• Bacs Direct Credit values have increased by 4% (12 months to November increased by 5%)

• Bacs Direct Debit values have increased  by 6% (12 months to November increased by 5%)

• Total Bacs values have increased by 4% (12 months to November increased by 5%)

Volumes for Bacs Direct Credits in December 2021 fell back by 5% when compared with December 2020, possibly due to increasing restrictions during the month, contributing to the year on year fall in volumes when compared with the 12 months ending December 2020.

The growth in Direct Debit volumes year on year has remained steady at 2% for the 12 months to December 2021 when compared with the 12 months to December 2020. As Direct Debits account for 70% of Bacs payment volumes, this has helped to maintain some growth during the year albeit reducing to 1% over the 12 months to December 2021.

Similarly, month on month values have decreased below those seen in December 2020. Year on year growth had been increasing each month but remained steady in October increasing again in November. However, with values only just ahead in the month, the increase in total Bacs values has reduced slightly to 4% for the period when compared to the 12 months ending December 2020.

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CHAPS

In the 12 months to the end of December 2021 we see that:

• CHAPS volumes have increased by 8% (12 months to November increased by 7%) 

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

• CHAPS values have decreased by 6% (12 months to October decreased by 5%)

This month the change was made up of an 5% decrease in retail / commercial based payments and a 6% decrease in financial institution based payments, compared to 3% decrease and 5% decrease respectively for the 12 months to November.

Retail / Commercial payment activity had fallen throughout 2020 – however for the month of December 2020 volumes just crept ahead of December 2019. Volumes fell back again in January 2021 but had recovered since as overall activity increased as restrictions eased during 2021. This has continued with volumes for December 2021 4% ahead of those in December 2020. Values however remain subdued with a fall of 3% for the month of December 2021 compared to December 2020.

The underlying resilience in Wholesale payment volumes continued throughout the year although values were decreasing month on month. This had reversed in November but the volumes have fallen back again in December 2021 by 3% leading to the increased fall in values for the year.

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Faster Payments

In the 12 months to the end of December 2021 we see that:

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

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

• Single Immediate Payment values have increased by 25% (12 months to November 26%)

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

Thus, the trend has continued in December with both volumes and values significantly ahead of 2020 levels. December 2021 saw an increase of 16% in the volume of Single Immediate Payments processed in the month compared to 2020 and 15% in the value of Single Immediate Payments.

The increased use of faster payments is a digital payment habit that will be here to stay, reinforced throughout each lockdown over the last 18 months and with volumes and values increasing as restrictions have eased. The increased year on year growth for the month of December is as to be expected as conditions became more in line across the two years. Overall year on year growth is as expected for 2021 – albeit the trajectory of growth now appears to be flattening.

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Cheques