Faster Payments initiative deemed a success

The Faster Payments system has processed 83 million payments in the past year

The Faster Payments initiative reaches its first anniversary on Wednesday, and early fears that the service could actually encourage fraudulent activity appear to be unfounded.

The system was set up to enable the faster transfer of funds between banks, and has already reached two important targets. Five million payments were processed on a single day on 2 March, and the total for the year reached nearly 83 million.

There were fears when the service was rolled out that, because it allows the speedy transfer of funds, banks would no longer have as much time to check and spot fraudulent transactions.

However, Stephen Ley, a partner in consultancy Deloitte's Enterprise Risk Services practice, said that figures from payments association Apacs have not shown significant spikes in online fraud since the system was introduced.

"The Faster Payments service doesn't seem to have triggered fraud itself," he explained. "We saw an increase in traffic through standing orders at first as they are perceived as lower risk, and the banks are also rolling out more two-factor authentication devices."

However, Ley admitted there were initial problems with the service last year, as phishers took advantage of public ignorance to lure customers into divulging their account details.

"There is still some way to go," he said. "Not all banks have migrated the service to all customers, but it's going in a way people expected and it really puts the UK ahead in Europe."

The scheme could be beneficial for businesses as it is available 365 days a year, allowing firms to pay suppliers later in the payment cycle if necessary, Ley added.