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Definition: Faster Payment Service (FPS)
Faster Payment Service (FPS) is a kind of banking service introduced to speed up money transfer transaction between two different banks. The scheme was officially launched on 27th May 2008. The usual time taken for interbank transfer is three days. FPS helps to reduce this time to one day or real time.
For using a FPS, both the sending and receiving banks should be member of the scheme. This is different from CHAPS since FPS can also be used for a large number and low value transactions, unlike CHAPS. CHAPS will still be used in case of high value same day transactions.
FPS will also allow the users to carry out transactions on weekends and other holidays. But this will also depend on the individual member banks. Banks can set their own rules regarding the single transaction limit and one day limit, the payment processing time and the holiday policy.
With the introduction of FPS, the customers will be able to transfer funds and pay bills via online and telephone banking on real time basis, will be able to carry out single day interbank transactions and get the real time details of their transfers.
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