Payment rails in numbers

Issue 526 | 11 September 2023

Payment rails in numbers

In this eighth round up of retail payments in 2023, for the 12 months to the end of July 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 have risen to 3% and 7% respectively with growth in the volume and value for the UK’s real time gross settlement system now at 4% and 8% respectively.

Note: All data is publicly sourced and is the latest available: Pay.UK July 2023.

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Source: Pay.UK

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Cheques

In the 12 months to the end of July 2023 we see that:

• Cheque volumes have decreased by 15% (12 months to June decreased by 16%)

• Cheque values have decreased by 8% (12 months to June decreased by 9%)

Whilst Faster Payments is experiencing double digit value growth the paper cheque continues to suffer double digit decline – the volume of cheques processed has now decreased by 15% over the last 12 months.

Cheque volumes total just over 1% of the total volumes processed by Pay.UK’s schemes (Bacs and Faster Payments) and continued decline in this share is expected as actual volumes decrease and growth continues elsewhere, particularly with Faster Payments.

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Faster Payments

In the 12 months to the end of July 2023 we see that:

• Single Immediate Payment volumes have increased by 20% (12 months to June 19%)

• Total Faster Payment volumes have increased by 15% (12 months to June 15%)

• Single Immediate Payment values have increased by 26% (12 months to June 27%)

• Total Faster Payment values have increased by 23% (12 months to June 23%)

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 continued to flatten, the overall increase year on year is still significant and looks set to continue for some while to come.

Continued growth in Faster Payments is expected from Open Banking A2A payments and payments initiated by overlay services such as Request to Pay and Variable Recurring payments. 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.

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Bacs Direct Debit and Direct Credit

In the 12 months to the end of July 2023 we see that:

• Bacs Direct Credit volumes have increased by 3% (12 months to June increased by 4%)

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

• Total Bacs volumes have increased by 3% (12 months to June increased by 3%)

• Bacs Direct Credit values have increased by 6% (12 months to June increased by 6%)