We can now support instantaneous manual deposits to your Plum account. Faster Payments Service requires you to approve each payment though… so don’t abandon your bank’s authorisation process, or your payment will fail!
You are the reason that Plum exists 🙌
Each day we are motivated by our mission to make everyone (starting with our amazing Plumsters) financially better off!
We’re eternally grateful to have such an engaged bunch of peeps like you supporting us, and the feedback you give is what shapes the future of Plum.
Since we recently switched to our new e-money provider, PayrNet (a subsidiary of Railsbank), most withdrawals are processed within 2 hours (with many completed in less than 20 minutes)...
So you told us loud-and-clear that you now want to deposit quicker 🏃♀️
Here at Plum we don’t like to disappoint, and today we’re totally vibing to announce we are now able to support Faster Payments Service (FPS). So manual deposits to your Plum account will now be quick as a flash!
What is Faster Payments Service?
Faster Payments Service is an initiative designed to speed up UK payments between customer bank accounts. This electronic service provides a modern alternative to the traditional CHAPS payment / BACS payment systems.
Because Faster Payments Service is designed for the modern, online banking age (it works just fine with telephone banking too, if you prefer to keep things old skool ☎️), it means the payments system has been integrated into the Open Banking tech ecosystem with relative ease (more on this below).
The technology's still new, but has already been adopted by most significant financial institutions in the UK (incl. major banks and building societies).
What Are the Benefits of Faster Payments Service?
With FPS, transfers are made in real-time (though this is not guaranteed), or at least same working day. It’s also compatible with mobile banking / Open Banking / PSD2… depending how technical you want to get. If you’d like to learn more about Open Banking then we have an article for that too!
This is significantly quicker than BACS (which takes three working days), and unlike CHAPS (designed for the transfer of large amounts), the Faster Payments Service focuses on the high volume of lower value transactions.
In addition to immediate payments, the faster payments scheme also allows more consistency. It operates 24/7, unaffected by weekends or bank hols.
How Will Faster Payments Service Improve Plum?
For us here at Plum, the main advantage of Faster Payments Service is that we’ll be less reliant on Direct Debits for manual deposits 😴
Since the very early days, we’ve used Direct Debits to collect deposits because they offer some benefits that suit the nature of our business. Namely:
- There’s no need for customers to authorise every single payment
- The amount can vary with each transaction
We’re not knocking Direct Debits, and we’ll continue to use them for auto-stashes (incl. Round Ups etc.) where the amount deposited will inherently vary.
But Direct Debits are slooooooow 🐌 From the point you issue a payment instruction to the moment it lands in your Plum Pocket takes two working days. And that’s if you’re already an existing customer with a mandate in place. Otherwise it’ll take an additional two working days to set that up.
By modern standards that seems glacially slow… so let’s speed things up!
How Does Faster Payments Service Work?
Ok, before we get into this, please remember that this article is only intended as a general intro to Faster Payments Service. If you’re an engineer or hardcore techie type, then you may also want to check out the post written by our UK Head of Engineering, Matt Spraggs 🤓 But if you’d prefer to keep things light-n-breezy, this is the place for you… so read on!
Because Open Banking doesn’t allow variable recurring payments, Faster Payments Service requires more interaction compared to a Direct Debit.
That’s because, with Faster Payments Service, each specific payment must be authorised by the customer within 6 hours. This is also the reason why they are only suitable for manual deposits.
Despite the obvious benefits that Faster Payments Service offers, there are also a few limitations to be aware of.
Firstly, and perhaps to state the obvious… in order to use this payment scheme, the payee or receiving bank must also have access to the Faster Payments Service.
Although the Faster Payments Service itself operates 24/7 and 365 (or 366), your bank may have a cut-off time of (e.g. 6pm), after which the payment will not be processed until the next working day.
There is a limit of £250,000 on the maximum value of individual transfers through Faster Payments Service, but many banks, building societies, and payment service providers set their own, much lower limits.
The Future of Faster Payments at Plum
Although we’ve started to roll-out Faster Payments Service, it’s still very early days here for the system here at Plum. The service is presently only available to iOS users, with release to Android scheduled for later in the year.
We’ve encountered a few teething problems, some of which were caused by a customer’s bank running into technical issues and rejecting the payment ✋
However, in many cases, the payment authorisation flow that customers are expected to navigate is just too long or confusing 🤯 This has resulted in a lot of people abandoning the process, with the result that their payment fails.
Since the customer experience during this part of the process is controlled by their bank there’s nothing we can do about this. But we hope banks will commit appropriate effort to streamlining the process as the technology matures.
What Does This Mean for You?
The most important thing to remember, is that if you’re attempting to manually deposit to your Plum account, then you need to persevere with your bank’s authorisation flow… no matter how awkward it may be.
You’ll have six hours to authorise the payment once it’s been created, after which time it’ll be rejected, and marked as failed.
If you'd like to learn more about Plum then you can check out our website.Download Plum