People have employed diversified payment schemes for everyday transactions as far back as the 1890s. European merchants in the 19th century sometimes traded using ‘credit tokens,’ and in the mid-20th century came the credit cards that we all use today. But technology took a further leap in the direction of paperless transaction come the 2000s, with the advent of online payment platforms like PayPal. And today, at the cusp of the first 20 years of the new millennium, we’ve welcomed an integrated technology that is even more cutting-edge than its predecessors: the faster payment system, or FPS.
FPS pertains to the immediate (real-time or near real-time) transmission of funds and verification of payment from a payer to a recipient within a 24/7 period. These fast payments occur throughout what are called the “four quadrants” of the payment industry, i.e. person-to-person (P2P), business-to-business (B2B), business-to-consumer (B2C), and consumer-to-business (C2B). The formula for success in a faster payment system constitutes the streamlined movement of both money and data. In the FPSs now used by institutions like banks and payment platforms, moving money and data to complete a transaction is even faster and more convenient than using a credit card.
Just how beneficial is FPS (Faster Payment System) in a setting like Hong Kong, where the city life is said to be one of the busiest in the world? To put things in perspective, here’s a list of the different qualities of the FPS and how each quality eases the burden from day-to-day transacting.
- Speed. The first distinguishing quality of the FPS is the greater speed it achieves during transactions. With the FPS, paperless payment can be done instantaneously, in real-time or near real-time, with a portable device like a smartphone or tablet. This helps you bypass the arduous tasks associated with payment, like lining up for a long time at the banking counter or the ATM.
- Convenience. Another noticeable quality of the FPS is that it operates round-the-clock. That means that you can do payments in the off-hours or when you have spare time, as opposed to setting aside part of your office hours just to complete a transaction. The FPS even enables you to finish necessary payments while you’re caught up doing something else, such as watching over the children.
- Flexible payment options. Many also seek out the FPS for the flexibility of payment options, such as using different currencies. This proves especially helpful in a milieu like that of Hong Kong, where a payer might want the option of managing both Hong Kong dollars (HKD) and renminbi (RMB). The FPS can also function as an extension of one’s mobile wallet, in which one can instantly use currency from their bank accounts to take care of different transactions.
- Ease of use. The FPS is structured precisely to enable ease of use, so that any type of customer with the respective application and with a mobile device can use it. It’s likely that all it will take to complete a transaction is the individual’s name from the mobile device’s Contacts or a machine-readable Quick Response (QR) code. The FPS will detail the instructions to follow, and if all are done according to plan, then the payment is considered as good as done.
- Personalized service. One additional touch that can be seen from recent FPS applications is the personalized element. For example, after the completion of a P2P payment, users on the platform might even be able to send personalized confirmation messages with exclusive stickers (ala Viber or Telegram). These additions make the service responsive, fun to use, and easily incorporable into everyday conversations, such as with friends or loved ones.
The impact of the FPS can be felt both on the large scale (like when one completes an important transaction with a business entity) and on the small scale (like when one sends emergency funds to a family member or pays a friend back for dinner). And in a lifetime that is now characterized by its fast, erroneous pace, even small-scale improvements can do a lot to combat daily disruption—thus making time and money easier to manage, and making life better for an ordinary citizen.
Sources:
- https://www.pymnts.com/news/faster-payments/2016/who-benefits-the-most-from-faster-payments/
- https://www.transpay.com/blog/newsroom/https/www.pymnts.com/smarter-payments/2018/global-faster-payment-systems-same-day-ach/
- https://www.bostonfed.org/publications/current-policy-perspectives/2014/costs-and-benefits-of-building-faster-payment-systems-the-uk-experience-and-implications-for-the-united-states.aspx
- https://www.finextra.com/blogposting/12085/faster-payments—its-time-for-corporates-to-take-a-fresh-look
- https://www.sc.com/hk/bank-with-us/sc-pay/
