“Certainty of fate” is one of those terms which seems on face value to clear and it applies to every payment system differently. Currently for the UK’s immediate payment system, Faster Payments, there is a lot of disagreement. In part these differences of opinion stem from the role play. This article looks at what we mean, who can provide certainty and when and what does it mean for retail payment transactions?
Why is it important?
If you are a payer or a payee, you want to know that the payment which has been initiated will be accepted by the receiving payment service provider (PSP) to be applied to the receiving account.
In many cases this is time critical, for example when you are in a shop and you want to leave with the goods you have bought but the shopkeeper wants to know they will be paid. For cash this may be obvious: with the exception of counterfeit currency, once the shopkeeper has the notes and coins in their till, they know they have been paid.
For electronic transactions, it can be a little more difficult and whilst we could wait for the funds to reach our accounts and appear on our statement, in reality this point can occur a lot earlier. So while receiving the funds and being able to use them are important, there may be a “point of no return” where the transaction will complete successfully and all parties can agree that.
The earlier this certainty can be provided, the better. In the shop example above, if I had to wait even five minutes – so the shopkeeper could be confident enough to let me leave with my purchases – that would be far too long.
I should say that I don’t think the term ‘certainty of fate’ is clear. That’s because even if certainty of fate is given, there are still some circumstances where that fate may be changed or incorrect, typically after a payment has succeeded. There are situations where a payment can succeed and later the funds transferred may be subject to other rules or laws, after the payment has been executed successfully. There may be many post-execution actions which could take effect including requests by the payer or the payee to return the funds, refunds related to disputes or fraud, and repatriation of criminal proceeds.
And in the case where the receiving payment service provider is not connected to the payment system directly or their systems do not operate 24x7, there may be delay in responding to an immediate payment. They are therefore reliant on their provider of access to the payment system to answer on their behalf. In many cases the access provider cannot say whether a payment can be accepted by their indirect PSP customer or not, for example they may not be able to confirm that the receiving account exists.
Slower payment systems, such as Bacs, SEPA CT and DD and US ACH can afford the time to handle a lot of these exceptions, but immediate payment systems have to respond quickly. This means either accepting that there may be acceptance responses without certainty that the payment will be successful, or higher rates of rejection. In the UK this has led to an acceptance response which is ‘qualified’, meaning that it cannot be guaranteed that the receiving account will accept the payment, but a response will be given within a specified time, typically one or two days. This leads to what I would call a ‘delayed rejection’ where a payment is rejected by the end receiving PSP as soon as it can, but beyond the deadline of the payment system.
It is this provision for uncertainty in accept/reject responses that has spurred debate in the UK as to whether the Faster Payment System is suitable to support an alternative to card payments for e-commerce and at point-of-sale. For UK Faster Payments, these delayed rejections go via a ‘return’ mechanism which indicates a successful payment to the sender and then sends back a return with a set of reasons why it was rejected, for example if the account was blocked, the accountholder bankrupt or the account simply did not exist.
What does this mean to end users?
Whether a payment worked or didn’t allow end users to take remedial action in the case of a failure. They can choose a different payment method, decided not to press ahead with a transaction, in short do something differently. We do this all the time, when one card is declined, we may move to a different card or choose to purchase later. If a direct debit fails, we can pay using mobile banking or another method. However, we can only do that if we know to do so.
If your payment has been successful, then the funds have left your account. So, if that payment takes a day or so to reach its receiving PSP and it is then returned, you then have to find another way to make that payment at that point. If you could know earlier that it was not guaranteed to succeed, you might choose to do something different.
This is particularly acute for those who are financially disadvantaged. If an end user has only €50 and pays a bill of €30 but that payment is delayed or ultimately unsuccessful a day or so later, they do not have funds to try something else. And failing to make a bill payment could impact their credit history or the services they need to live.
In essence being able to know immediately when you make a payment that it will be successful is an important capability for some, but not all, payment needs, and only the payer and possibly their PSP knows that.
How can we define it?
For me, it’s simple – will the payment been accepted into the receiving account by the payment services provider that operated that account, or not? This certainty should be provided as early as possible. A corporate treasurer summed it up best for a receiver: “I don’t need the money in my account now, but I do need to know that the money will be received and when I should expect it.”
Pay.UK, the operator of Faster Payments, has recently published a paper on its work since February 2025 on ‘certainty of fate’ as it applies to the Faster Payment System and more specifically to A2A e-commerce and POS payments.
It is fair to say that their thinking has evolved over the engagement with industry but they are now more aligned with industry and the regulators.
Certainty of Fate for the payer and payee is about being sure whether a payment has been successful or unsuccessful; and the timeliness of gaining this understanding.
It's important to think about the impacts not only on customers but also on all the PSPs involved in a transaction: both those connecting directly and those connecting via another PSP.
From a payment system perspective, the payer and payee find out through their PSPs whether the payment was or was not successful so in reality it’s about the payment system telling the PSPs at each end of the payment a success or fail outcome as soon as possible, for them to inform their customer(s),
What is it not?
It may seem trite, but certainty of fate relies on removing the causes of uncertainty. Removing some of them does not guarantee certainty that a payment will be successful – applied to a receiving account – or not. And even removing all of the causes does not guarantee that something might happen afterwards, for example a sender may request their money back or the recipient may want to return it. So what are these causes of uncertainties?
Area of uncertainty | Description |
Payer’s funds | Does the payer have sufficient funds available to make the payment? |
Payer’s authorization | Has the real accountholder authorized the payment? |
Sending PSP’s checks | Does the payment pass all the financial crime, fraud and other checks before sending? |
Sending PSP initiation | Has the sending PSP initiated the payment with the payment system (through another PSP if appropriate)? |
Payment System or Intermediary receipt | Has an intermediary other than the ultimate receiving PSP received the payment instruction? |
Receiving PSP delivery | Has the payment instruction been delivered to the receiving PSP? |
Receiving account existence | Does the end receiving account exist? |
Receiving PSP checks | Are there any issues which would prevent crediting the payment to the receiving account? |
Receiving account | Have the funds been credited to the account? |
Payment settlement | Has the payment been settled? |
I would argue that ‘certainty of fate’ can be provided once the Receiving PSP checks have been undertaken, for example is the account open and is it not blocked.
Why now?
Why is ‘certainty of fate’ important now? The UK National Payments Vision talks about providing an alternative to card payments, but running on another rail. This is currently envisaged to be a Faster Payments transaction initiated through Open Banking.
In addition, other uses for ‘certainty of fate’ including asset transfers such as some house purchases, transfers of deposits or funds to other financial services, and simple peer to peer marketplaces, all require some degree of certainty that a payment will be successful.
Pay.UK’s work on certainty of fate.
Pay.UK’s paper discussed their work on this topic for some Faster Payments and for some of those payments which are an alternative to using cards. They make the claim that qualified acceptance – acceptance by a direct participant on the basis that it should be applied to the receiving account after some delay – is good enough. I believe the issue of ‘delayed rejection’ created by qualified acceptance does not provide the certainty desired by a payer, a payee, or their PSP(s).
The paper lays out some useful statistics which help to think about the problem but doesn’t include all of the data promised to industry.
5% of accepted Faster Payments have qualifications, meaning that they could be returned almost in the next few days for example if they were inapplicable to the receiving account.
The highest rejection codes for Faster Payments are for system failure reason: the receiving PSP system was down or not logged in. The next two are for account non-existence or account blocked.
It is interesting that the modal qualifier used as a qualified accept is “0080: At an unspecified time and date within the PSD guidelines”. So, the payment will be applied at some point in the future. Alternatives specify which business day the payment will be credited. This doesn’t seem like the outcome of an immediate or “Near Real Time” payment system.
For payments returned, only 44% are scheme returns, meaning there is some alignment with the scheme rules. Of these scheme returns the largest subset (25%) is “Other” for which no further information is available. For the rest of the scheme returns (75%), they must be accounts which are not available in real time, such as those accounts held at indirect participants.
For non-scheme returns there is no further explanation.
Of the payments which received a qualified acceptance with a scheme codes, it appears at least 42.5% are likely to have been returned by an indirect participant as a direct participant would have been obliged to reject the payment, or there is broad non-compliance on that point.
These statistics are helpful, but they don’t consider the rate of subsequent returns for payments which receive a qualified acceptance. Across the entirety of FPS, this is 0.07%, but knowing that only 5% of payment receive a qualified acceptance this means the return rate could (mathematically) be up to 1.4%. If this were the case, there would be a significant issue with relying that payments which receive a qualification will succeed.
Proposed clarification.
In Pay.UK’s paper they propose to clarify some areas of the Faster Payments rules, but don’t specify what the clarification will be. I am not clear that clarifying the existing rules will go far enough to make any change, and without seeing the proposed clarifications it is impossible to support them. We await further clarity on how the clarifications.
Conclusion.
Certainty of fate has surely taken up a lot of industry and regulator time over the last nine months. What is currently envisaged is not what was originally proposed by the operator of Faster Payments, which was to remove the ability to provide qualified acceptance under some circumstances.
What we should expect is that we can ask our payment systems and PSPs, if it is important, to tell us conclusively that a payment was or wasn’t successful. It seems that putting that control back into the hands of end users and their PSP(s) is not going to be delivered quickly.
Jonathan Williams, Principal Consultant
Jonathan Williams is a Principal Consultant at Consult Hyperion, consulting by Fime. He was previously with the Payment Systems Regulator working with policy teams to understand and address issues in the market including APP Fraud, Infrastructure Renewal and Card Acquiring. He has a background in IT, cybersecurity and financial crime prevention and has worked both for start-ups and a FTSE 100 companies including Content Technologies, Virata and Experian. He is co-author of the BSI Code of Practice on Digital Identification and Strong Customer Authentication (PAS499). He holds an MA in Natural Sciences and a postgraduate degree in Computing from the University of Cambridge.
