Bacs busts 100 million payments a day mark

Whaaat? During the implementation of FPS at a Top 3 UK bank, the agenda of one meeting was "Death of BACS". The consensus prediction was that FPS would kill BACS three years after its go live in 2008. So many years later, BACS breaks transaction volume records. Hmmm, this just goes to show that these "A will kill B" and "C will disrupt D" kind of dire predictions rarely come true in financial services.

I don't think FPS provides direct debits and that makes up 90% of the BACS payments?

@james Yes you're right - FPS is credits only.  In the year to June 2015, Bacs volumes were 3.8 billion Direct Debits (up 5% on last year) and 2.1 billion Direct Credits (0% change on last year).  FPS voume was 1.2 billion (up 13% on last year).  

So whilst DD volumes are still rising, DC volumes are flat and some of this may be down to the rise in FPS volumes; however most of the FPS rise is due to displaced cash and cheque transactions (imho)

@JamesP: You're right, FPS didn't provide DD then. Thanks to @ChrisD, we have it from the horse's mouth that it still doesn't. But, you know how it is with disruptions - people expected FPS to do everything except make coffee! On a more serious note, because money left the payor's account on T-3 in the case of BACS and T-0 in the case of FPS, the expectation was that payors would convert their BACS DD mandates to FPS DC - I forget what the standing instruction equivalent was called in FPS - so that they could hold on to their money for a couple more days. Looks like that hasn't happened.

@Ketharaman: Standing Orders used to be processed in Bacs, but as they generated float they had to migrate to FPS by January 2012 to comply with PSD.  These Standing Orders represent about 0.3 billion of the overall FPS total, and these grow at 4% a year.  The bulk of FPS transactions are Single Immediate Payments (ie one-off payments initiated by customers) and these are growing at 20% a year.  These are mainly substitutes for cash and cheques, although small employers are increasingly using it to pay staff, particularly if they work variable hours.

There is no float in Bacs DD or DC.  Although it is a three-day cycle, the debits and credits are applied simultaneously on Day 3. 

TY @ChrisD for the clarifications and the figures. I received my June 2008, if not even May 2008, salary via FPS. I remember my company's CFO telling me that the company switched from BACS to FPS to save on float. Now that you clarify that there's no float in BACS, I guess the switch was triggered by some other reason. I assumed that the same reason would drive every company to do the same. Now, if the mainstream market still uses BACS for payroll, as your comment about small employers seems to imply, I guess I'm guilty of the same mistake made by most fintech professionals who assume that their personal preferences and experiences would automatically spread like wild fire to the overall market!