Faster Payments enablement guide - NatWest

Faster Payments enablement guide
Agency Bank

Faster Payments – mandatory reach to be
completed by 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 also be able to receive Faster Payments.
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.
As an Agency we are sure you are already aware of these messages and have given some consideration to what is
required of you in advance of 2012.
What you need to do
Your sort code(s), as detailed in the covering email has (have) been identified as Bacs addressable sort codes and are
required to become Faster Payments enabled before the end of December 2011.
The FSA has clearly indicated that non-compliant payments, with execution timescales longer than D+1, will not be
acceptable from 1 January 2012 and that all payment services providers (Agency Banks and Member banks) are
responsible for ensuring compliance on this, including payments sent to non Faster Payments reachable sort codes.
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 Exchange due to the migration of Datalink services onto Bankline
Exchange channels. For the purpose of this document we will refer to it under the generic name Datalink.
2

Receiving Faster Payments
Impact
Your sort code will be enabled on the Industry Sort Code Directory (ISCD). You will be able to receive Faster
Payments for your customers.
Funds availability
Funds that are received via Faster Payments on an intra-day basis will be available for use as soon as they are
applied to your settlement account. As entries are received, the value of these will be added to the accumulating
balance of your account which will be viewable via Bankline, our internet banking service or Bankline Exchange.
Customers using Bankline will have access to an intra-day balance for each Agency Clearing sort code.
This balance will increase throughout the day as Faster Payments are received.
After 18.30 each day, payments already received into your sort code/s will be posted to the associated
settlement account and the intra-day balance will be reset to zero. Any payments received after this time will
start accumulating as part of the next day’s balance.
Statement changes – new bulk credit
A new bulk credit will be posted to your settlement account each day for Faster Payments.
To ensure you can reconcile all payments received into your Agency clearing 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.
Payments received after 18.30 on working days or on weekends and English bank holidays will show on your
statement as the next working day, for example a payment received on a Saturday will be shown as a Monday
statement entry.
Like today, where there are separate bulk credits for Bacs and credit clearing incoming payments, a new bulk
credit will be posted for all Faster Payments received. This bulk credit is only generated on English bank working
days. The payment details that make up this bulk credit are available via your Datalink file.
The narrative for the bulk credit will show that it relates to Faster Payments and the sort code. The narrative will
be shown as: FP SETLMT xxxxxx (your sort code).
3

Faster Payments – Data file changes
As indicated, when you enable your sort code for Faster Payments, there will be some changes to your data files
and settlement transactions for the Datalink service. The impacts of these are summarised below.
Data files
As payments may be received intra-day and will contain more sender information, we will provide you with
data in the Faster Payment file format (ISO8583) and options to increase the frequency that you receive your
data. As payments will be received in near real time, you will need to consider when you will update your
customers’ accounts.
Unlike your existing data file, the Faster Payments value date is the same date as the file; whereas Bacs Credits
and/or Paper Credit Clearing are the business day after the file is made available. Your existing data file is provided
on Day 2 of the 3-day clearing cycle.
File Format
For Faster Payments transactions you will be required to accept the file in ISO8583 format. To assist you we have
provided information on the ISO8583 format in Appendix B and a full file format is included in your enablement pack.
Separate Faster Payments file(s)
Faster Payments received at NatWest will be batched periodically during the day and can be 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. The benefit is having the ability to receive files intra-day in order to update your customer accounts/records
in the earliest possible timescales.
Please refer to the Faster Payments file times on page 6.
New Faster Payments return reason codes
Where a Faster Payment cannot be applied to the beneficiary’s account, you may receive a Faster Payment
Return Credit payment.
One of the following return reason codes will be provided in the payment return code (field 126 in the
ISO8583 format):
0001 Beneficiary sort code/account unknown
0002 Beneficiary account closed
0003 Beneficiary account stopped
0004 Beneficiary deceased
0005 Account not identified without data
in reference field
0006 Beneficiary account name and number
do not match
0007 Return requested by sender of
original payment
0008 Account is not in currency quoted
0009 Beneficiary not expecting
funds/instructed return
0010 Terms and conditions of account do
not allow receipt
0011 Fraudulent payment suspected
0012 Account transferred
0013 Reason not specified because
of sensitivities
0014 Other
4

File Frequency
As Faster Payments may be received at anytime during the day, you will be required as a minimum, to take a daily
data file.
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 are established.
File names
Each file will have a new name to differentiate if from your existing data file/s. Your internal systems will need to be
updated to recognise this new name.
File availability time
If you currently download your existing data 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.
5

Faster Payments files
File collection: Daily Reports
As the bulk credit cut off time will be 18.30 daily, to assist your reconciliation, you will be required to take as
a minimum 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
Additional files will allow you to update your customer accounts/records during the day on which they are received.
File collection time
Files can be collected as shown one hour after they are ‘cut off’ in our systems.
During this time we will also match off any Faster Payment Reversal Debits against your Faster Payments Credits
to minimise (and we expect in most instances to eliminate) the number of Reversal Debits you may receive.
6

Datalink Charges
Datalink/ISO8583 file charges
As you are required to take 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
Agency Clearing charges
There will be no change to how we charge you for Faster Payments transactions into your Agency Clearing sort
code. Transaction volumes will be captured in the same way as Bacs receipts and charged in line with agreed
existing arrangements.
7

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
service level agreement, 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 will provide these transactions to you with
a new transaction code.
Reversal transactions will be debits to your Agency Clearing sort code. When you are enabled to receive Faster
Payments, you will also need to change your procedures to handle the new debit transactions in your Datalink file.
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
8

Appendix B: Faster Payments
ISO8583 Format
ISO8583
You are required to receive a separate Faster Payments file 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 any other file format.
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 this 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. 90079503