If you have a bank account, then it is likely that you will have sent or received a payment via bank transfer. However, many of us take this ability for granted, as if it has always been an option. Read on to find out more about where the bank transfer originated and how it has been brought up to date for the demands of modern society.
Where Did The Bank Transfer Come From?
The first money transfers took place over 150 years ago when telegrams came into force. Transfers were sent via telegram, and it was in America that the first monetised telegram was sent. Western Union is a well-known name in the world of finance, and they were the first company to send money via a telegram.
Telegram transfers consisted of one person paying an amount to a telegram station and then the telegram station would send a telegram instructing the destination to pay the specific sum to the person their end. There was a fee that was charged to access this service, and it became a popular way to ‘wire’ money to people that were far away from the sender.
How Did Banks Change The Transfer System?
When banks began offering transfer services, they were keen to revolutionise the process, and when computers became a main part of banking, they were able to make all transfers electronic. This helped to ensure safety and reduced the costs that were involved in sending money.
We see the result of electronic payments today as easy to use, especially when you have access to an online banking service or banking app and can send the money to the recipient by completing a simple form via your online banking or mobile banking app.
When Did Faster Payments Land?
As more people began to use electronic bank transfers, there was a pressure to make these payments quicker than ever before and so, in 2008, the Faster Payment Service (FPS) launched.
The idea behind the FPS was to build a system that could immediately transfer money from one bank account to another. This is the most common type of bank transfer today, and most people enjoy the Faster Payment Service when sending or receiving money, making it a great way to get your cash to where it needs to be, quickly. The only caveat with the FPS is that the first transfer you set up for a new payee can take up to two hours to process. Once this is complete, you can generally enjoy immediate payments with ease.
When you consider where it began, the bank transfer system has evolved well over time and is now a widely used and well-regarded system. If you are keen to use a bank transfer, then you just need to login to your online banking or mobile banking app and follow the steps carefully. Before long, you will be using bank transfers all the time!