Payment rails in numbers
Issue 490 | 28 May 2023
Payment rails in numbers
In this fifth round up of retail payments in 2023, for the 12 months to the end of April 2023, we continue to see double digit growth in the volume and value of Faster payments and double digit decline in paper clearing.
The growth in volume and value for the UK’s bulk clearing scheme are unchanged with growth in the volume and value for the UK’s real time gross settlement system declines by 1%.1
Over 50 years of faithful service
After over 50 years of faithful service and now processing just over 6.7Billion transactions per annum, Bacs, the UK’s bulk ‘push’ / ‘pull’ payments scheme, continues to meet a clear end user need. The next few years are, however, crucial for the future of Bacs and its schemes as the opportunity (and threat) of the planned New Payments Architecture begins to loom on the horizon.
Continued double digit growth
After 14 years, Faster Payments continues to experience double digit annual growth as the boost from digital habits formed during the pandemic remains in force. The New Payments Architecture will bring new types (or ‘flavours’) of the current single form instant payment which will undoubtably lead to continued volume increases. This, coupled with the increase in Open Banking initiated payments and overlay services such as Request to Pay and Variable Recurring Payments suggests a very healthy future for the ‘granddaddy’ of real time payment schemes.
Quietly getting on with its job
From the volume and value data it is clear that CHAPS quietly gets on with its function in the background of keeping the markets functioning and making house moves happen – but, quite rightly, remains a mystery to most of the UK population.
Time for an inevitable decision
With annual volumes of cheques processed being close to the single largest Bacs processing day the decline in paper based transactions continues. The agreed measure for the eventual end of the cheque was ‘for as long as they are required’ – at just 125Million cheques per annum the inevitable decision must be on the horizon!
Faster Payments
In the 12 months to the end of April 2023:
Single Immediate Payment volumes have increased by 18% (12 months to March 18%)
Total Faster Payment volumes have increased by 14% (12 months to March 14%)
Single Immediate Payment values have increased by 28% (12 months to March 29%)
Total Faster Payment values have increased by 24% (12 months to March 25%).
Faster Payments volumes continue to be bolstered by the switch from analogue to digital payments, reinforced due to the pandemic and also by the growing importance of Open Banking initiated Account to Account (A2A) payments.
Although the trajectory in the increase in the volume of payments has flattened once the pandemic restrictions eased, the overall increase year on year is still significant and looks set to continue for some while to come.
The future is certainly bright for Faster Payments – continued growth from Open Banking A2A payments and payments initiated by overlay services such as Request to Pay and Variable Recurring payments is certainly on the agenda. The growth is also likely to be bolstered through the introduction of new Faster Payment types (or flavours) as part of version 1.0 of the planned New Payments Architecture (NPA) and, perhaps, through a future planned migration of Bacs Direct Credit payments into the NPA.
Bacs Direct Debit and Direct Credit
In the 12 months to the end of April 2023:
Bacs Direct Credit volumes have increased by 5% (12 months to March increased by 6%)
Bacs Direct Debit volumes have increased by 2% (12 months to March increased by 2%)
Total Bacs volumes have increased by 3% (12 months to March increased by 3%)
Keep reading with a 7-day free trial
Subscribe to Payments:Unpacked to keep reading this post and get 7 days of free access to the full post archives.