Faster Payments enablement guide - NatWest

Faster Payments enablement guide
NatWest Collection Account (HOCA)

Faster Payments – Mandatory reach to be
completed by the end of 2011
Background
From 1 January 2012, the UK’s Payment Services Regulations require all qualifying payments between payment
service providers to arrive the next working day. To achieve compliance all sort codes which can receive Bacs
credits must be able to receive Faster Payments by the end of 2011.
The CHAPS Company, which operates the Faster Payments service, has mandated this with the backing of the
FSA and Bank of England. Progress will be monitored across the industry. NatWest is also reviewing its Faster
Payment limits to ensure that non-compliant payments can be sent as Faster Payments.
What you need to do
As a HOCA customer you have been identified as having a sort code (or sort codes) set up to receive Bacs credits
which is on the Industry list of sort codes which must become Faster Payments enabled before the end of
December 2011.
The Faster Payments service was launched in May 2008 and allows both consumers and businesses the ability to
make UK domestic credit payments in near real-time via Internet and Telephone banking services at any time, any
day of the year.
Decisions
This Faster Payments enablement guide contains all the information you need to help you decide when to receive
your Datalink* files.
When you have considered the changes required to your internal systems and processes, you will need to complete
and return the enclosed “Additional services/Amendment Form”.
Next steps
If you have any further questions not covered by this guide, please email: FPSwitchon@natwest.com
*Datalink will in the future be known as Bankline Direct due to the migration of Datalink services
onto Bankline Direct channels, but for the purpose of this document we will refer to it under the
generic name Datalink.
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Receiving Faster Payments
Existing payments into your HOCA
Payments that you currently receive into your HOCA sort code (i.e. Bacs Credits* and/or Bank Giro Credits)
will continue without disruption. You will however, notice a reduction in the number of Bacs Credits as these
become Faster Payment credits.
Statement narrative (please refer to Page 4).
At the end of each business day you will see a new settlement entry on your account.
Funds availability (please refer to Page 4).
Funds received as Faster Payments arrive on an intra-day basis and will be available for use as soon as they
are applied to your Business Current Account.
The value of these payments will be added to the accumulating balance of your HOCA which will be viewable
via Bankline, our Internet banking service. You will also see the number of payments received.
Data files
As payments may be received intra-day and will contain more sender information, we will provide you with
the opportunity to update both the data format and the time you receive your data.
You will if you choose still be to receive data in the same format as now with minimal change. Please refer to
the “Faster Payments Collection Account Options” pages.
The Faster Payment in your files will have new transaction codes (please refer to Page 6).
*This will mean Bacs Credit payments sent using Bacstel IP or Bacs Bureau.
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Statement Changes
A new bulk credit will be posted to your settlement account from the date your sort code is enabled.
The narrative of this bulk entry will be shown as: FP SETLMT xxxxxx (your sort code).
Funds availability
Bankline will show the accumulating number and value of Faster Payments into your HOCA as shown below:
At the daily working day account cut off at 18.30 cut, the balance visible on the Bankline screen will be frozen
at the total amount received until the account entry is posted.
Payments after 18.30 will start to accumulate separately as part of next day’s balance but will only be visible
after the prior day’s entry is posted to your account.
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Faster Payments options
As a result of enabling your sort code for Faster Payments, there will be some changes to your data files and
settlement transactions for the Datalink CAS service. The changes will depend on which option you select to
receive the Faster Payments information.
The options and changes are summarised below and each option is expanded in the following pages.
Option 1: A merged CAS file
You may find this easier as it does not require you to receive an additional file. Faster Payments transactions
would be stored at NatWest as they are received, then merged into your existing CAS file so that you have one
file to process in the same way that you do today. You will receive the benefit of the funds in near real-time,
and if you process your CAS file overnight, your customer accounts/records will be updated earlier.
Option 2: Separate Faster Payments file(s)
Faster Payments received at NatWest will be batched periodically during the day and made available to you
in Faster Payments files throughout the day. You have the option to receive between one and five files at
various times.
You can receive the information in the same file layout as your CAS file or a new ISO8583 format is also available.
This option is likely to present the most changes to your processes. The benefit is having the ability to receive files
intra-day in order to update your customer accounts/records in the earliest possible timescales.
We have provided some more information in Appendix B and a full file format is included in your pack.
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Option 1 – Merged CAS file
Impact
With this option, Faster Payments will be included within your existing CAS file. Impacts and changes required are
detailed in the previous slide but details specific to the merged CAS file are detailed below:
Your sort code will be enabled on the Industry Sort Code Directory (ISCD)
The file you receive will now also contain the following types of Faster Payment with new transaction codes:
Code 68 – Faster Payment Incoming Credits
Code 69 – Faster Payment Return Credits
Code 40 – Faster Payments Reversal Debits (see Appendix A )
The file availability time will now be 19:30 and this may be later than you currently receive your CAS file
If you receive a merged CAS file, you can decide at any time to migrate to a separate Faster Payments
file. Parallel running (receiving both files concurrently) will be available on request for one month to assist
your testing and transition.
Changes Required
A new bulk credit will be posted to your settlement account each day for Faster Payments. Since the Faster Payments
value date is the same day, your CAS file will reconcile against settlement transactions over two business days:
Faster Payments settlement – same day as the file is made available
Bacs Credits settlement transaction – business day after the file is made available
Credit Clearing settlement transaction – business day after the file is made available.
File Frequency: Weekly, Fortnightly or Monthly Reports
As Faster Payments may be received at anytime during the day, you will be required to take a daily file for Faster
Payments. If you currently take your file less frequently than once a day, you can continue to do so for Bacs and
Credit Clearing.
Although we will generate a Faster Payments file every day, you will still have the option of collecting several files
at once at your regular scheduled frequency instead of picking them up each day. You should bear in mind your
customer proposition once real-time fund transfers become established.
File name
A new file name will be created for the merged CAS file and your internal systems will need to be updated to
recognise this.
File availability time
If you currently download your CAS file before 19:30, you will need to change your scheduling to retrieve the
file after 19:30. If you process files on an overnight batch basis, you should check the timing of this process.
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Reversals
Reversal transactions may be received. These will be included in your CAS file with a transaction code of 40.

Option 2 – Separate Faster Payments file(s)
File collection: Daily Reports
As Faster Payments may be received any time during the day, we will make files available more frequently than
once a day, to ensure customers who need regular information have this when required. To ensure you can
reconcile all payments received into your Collection Account sort code, the bulk credit cut-off time will be 18.30
daily and the bulk credit will be posted overnight to your settlement account. To assist your reconciliation, you
will be required to take a mandatory file after 18.30 each day.
You will have the option of selecting up to five files per day at the following times:
File cut off time
Latest time file available
Optional or
Mandatory file
Types of payments received
07.00 08.00 Optional Standing Orders >90% of total
Forward Dated payments and SIPs
12.00 13.00 Optional Standing Orders, Forward Dated
payments and SIPs
15.30 16.30 Optional Standing Orders, Forward Dated
payments and SIPs
18.30 19.30 Mandatory All Faster Payments received intra day
or the balance if taking other files
throughout the day
22.00 23.00 Optional SIPs received since 18.30
Impact
A separate file may assist your reconciliation as all transactions in the file will be Faster Payments, and therefore
kept separate from other payment types in your existing CAS file. The value date for the Faster Payments file will
be the same date as the file is received. Your existing CAS file is provided on Day 2 of the 3-day clearing cycle.
By taking separate Faster Payments files, you can use these to update your customer accounts/records on the
same day they are received.
Changes Required
File name
New file names will be created for Faster Payments files incorporating the file cut-off time. Your internal systems
will need to be updated to recognise the new file names.
File collection time
Files will now need to be collected at the selected times, including the mandatory file after 18:30. Your existing
CAS file will be available at the usual time.
Reversals
Reversal transactions may be received. These will be included in your file.
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HOCA & Datalink Charges
Collection Account charges
There will be no change to how we charge you for Faster Payments transactions into your Collection Account.
Transaction volumes will be captured in the same way as Bacs receipts and charged in line with agreed
arrangements.
Datalink/CAS file charges
If you decide to enable your sorting code and have Faster Payments included in your existing daily CAS file, there
will be no change to existing charging arrangements.
If you opt for separate Faster Payments files (between one and five per day) then there will be an additional
monthly fee for the Faster Payments file(s). This charge will be based on the number of files per day, plus a per
item tariff.
Charges are as follows:
One file per day: £200 per month.
Additional daily files: £100 per month.
Maximum fee element: £500 per month.
If you currently receive a periodic CAS file (e.g. weekly or monthly) and you wish to receive Faster Payments
included in this file, the file frequency will require to be changed to daily. This will result in an increase to the
monthly fee that you pay for the service, and this will be agreed with you on migrating to the daily service.
There will be no change to the transactional charges for items reported in Datalink files.
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Appendix A: Faster Payment Reversals
Payment Reversals
These transactions will only happen when there is a delay in the processing links between the receiving bank and
the Central Infrastructure. If a receiving bank has not responded to the incoming payment within the agreed SLA,
the Central Infrastructure will reverse the payment. Please see the diagram below for more information.
To help you identify and reconcile these new types of transactions, we have introduced new transaction codes.
Reversal transactions will be debits to your Collection Account sorting code. Currently Collection Account sorting
codes only receive credit transactions. When you are enabled for Faster Payments you will also need to change
your procedures to handle the new debit transactions in your Datalink file.
You may wish to check your settlement account via Bankline or your statement to ensure that you identify any
reversals. You will need to apply these to your own customer’s accounts.
The incidence of reversals should be very rare and to reduce them further, NatWest will match reversal debits
against the corresponding credit wherever possible without delaying your Datalink file. You should, however, make
allowance for the possibility of reversal debits being reported in your file.
Sending Bank
1. Payment out
2. Payment in
Receiving Bank
Central
Infrastructure
3. Timeout
no response
5. Rejection
4. Payment reversal
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Appendix B: Faster Payments ISO8583 Format
ISO8583
If you opt to receive a separate Faster Payments file, you can receive this in the same format as your existing
CAS file, or, you can receive the information in ISO8583 format. This is the industry format used by the member
banks to pass payment data to and from the Central Infrastructure.
It provides a greater level of detail than your normal CAS file format.
If you initially opt for CAS format, you can migrate to ISO8583 format at any time, and parallel running will
be available.
The list below is a sample of some of the additional information available in the ISO8583 format compared
to CAS. A full file specification document is included in the pack.
Additional Information provided in ISO8583 (field length)
Transaction Reference (18)
Beneficiary Customer Account (34)
Originating Credit Institution (11)
Originating Customer Account (34)
Charging Information (204)
E2E Ref (31)
File I.D. (32)
Beneficiary Credit Institution (11)
Originating Customer Account Name (40)
Originating Customer Account Address (140)
Beneficiary Customer Account Name (40)
Beneficiary Customer Account Address (140)
Remittance Information (140)
Payment Return Code (8)
Returned Payment - Faster Payments I.D. (42)
National Westminster Bank Plc. Registered in England No 929027. Registered Office: 135 Bishopsgate, London EC2M 3UR. 90079501