VocaLink, in Association With PricewaterhouseCoopers LLP UK, Publish First Detailed Research Report Into the UK Faster Payments Service

LONDON - VocaLink, the international payments specialist, today announced the findings from the banking industry’s first piece of qualitative research into the UK’s Faster Payment Service (FPS) since its launch in May 2008. The analysis, conducted by VocaLink in association with PricewaterhouseCoopers LLP UK (PwC), identifies the key lessons learnt from the Faster Payments Service rollout in the UK, based on interviews with FPS bank participants and scheme members, and provides a roadmap for any bank or economy seeking to benefit from real-time payments.

The research shows that Faster Payments has evolved from its regulatory origins into offering a clear business case for adoption of the service. Two-thirds of banks interviewed felt that Faster Payments could deliver new revenues for banks.

One of the participants in the research, Mike Banyard, Senior Payment Industry Commercialisation Manager at HSBC Bank Plc, explains: “As one of the founding members of the service, we are reaping the benefits of seizing the commercial advantages of Faster Payments early on. From the outset, far from regarding Faster Payments as a compliance issue, we have embraced the real-time technology as a way of introducing new and improved services to our customers and unlocking new revenue opportunities.”

The research showed that the experience of participating banks provides a strong business case for real-time payments to be rolled out into Europe and beyond. However, the research identified key lessons for banks to consider when implementing any real-time payment infrastructure in the future.

Banks which have already invested in modern real-time accounting systems will find it easier to implement and operate faster payments than their counterparts with old legacy and batch-based systems. However, those banks with legacy systems will find that real-time payments provides a much-needed incentive to re-architect their transaction banking platforms to cope with the demands of the modern payments world. Secondly, banks introducing real-time payments should consider a charging model for customers from the outset. Finally, it is clear that real-time payments bring banks back into alignment with their customers needs and, crucially, provide a platform on which they can develop more value-added services for customers.

There are a number of benefits that are highlighted in the research, from helping to reduce cheque and cash volumes to delivering benefits within the corporate and government sectors. Businesses will recognise the greater flexibility of Faster Payments to integrate within existing business processes. Amongst banks interviewed, those who are helping businesses in this way are already showing revenues that exceed costs, and are predicting an early payback. ‘We have a 3-year payback on the investment’ observed one of the bank representatives.

Martin Wilson, Chief Commercial Officer at VocaLink, comments: “The analysis dispels some of the myths and tells the facts about Faster Payments. Operationally, banks have had to implement Faster Payments alongside other instruments, incurring new, fixed costs. Significantly, however, some banks are already able to point to areas where improved business models are leading to a reduction in operational costs, most notably in the areas of exception management. The completion of these final steps takes Faster Payments from infancy to maturity, and as it approaches its adulthood, FPS is beginning to earn its living.”

The research will be officially launched at Sibos in Hong Kong on Tuesday 15 September at 5:00pm at stand 3E05.

Notes to Editors

Should you be interested in discussing the research, please do not hesitate to contact: vocalinkuk@hotwirepr.com or call +44(0)20-7608-2500.

This unique research, based on stakeholder interviews, provides an insight into the current experience of the banking industry which includes a case study on HSBC Bank Plc. It also anticipates how banks will leverage and profit from the Faster Payments Service going forward.

About the VocaLink Faster Payments analysis

This study comprises interviews with six of the FPS participant banks to understand the practitioners’ experience and where they see FPS developing in the future. The OFT, UK Payments Ltd and the Payments Council were also interviewed. The analysis delivers valuable insights into the FPS marketplace highlighting some of the successful experiences and areas for development.

About the Faster Payments Service

The UK Faster Payments service is owned by its member banks and the scheme is run for them by CHAPS Co.

The UK Faster Payments Service has been a joint project between VocaLink, as the infrastructure provider, the Payments Council, as the industry body overseeing the development, and the member banks. The VocaLink Real-Time Payments Platform is unique in facilitating single real-time payments over a variety of channels including mobile, internet, telephone and even payment card. It enables payments from consumer to consumer, consumer to business, business to consumer and business to business.

About VocaLink

VocaLink is a specialist provider of payment services to banks, their corporate customers and Government departments. It processes domestic and international automated payments and provides ATM switching solutions. On a peak day, the VocaLink automated payment platform processes over 90 million transactions and over half a billion in a month. Its switching platform connects the world’s busiest ATM network of over 60,000 ATMs. Its Real-Time Payments platform provides the central infrastructure for the UK Faster Payments service. VocaLink is working with BGC (Bankgirocentralen) to provide outsourced processing for the majority of Sweden’s domestic payments.

For more information visit www.vocalink.com

About PricewaterhouseCoopers LLP UK

PricewaterhouseCoopers LLP UK provides industry-focused assurance, tax, and advisory services to build public trust and enhance value for its clients and their stakeholders More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

“PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

Source: VocaLink

For further information please contact: Scott McLean, Hotwire, +44(0)20-7608-2500 or vocalinkuk at hotwirepr.com; Deborah Souter, VocaLink Limited, +44(0)870-920-8651 or deborah.souter at vocaLink.com