What is “FAST”?

The Instant and Continuous Transfer of Funds System (FAST) is a groundbreaking instant payment system in Turkey, operating on a 24/7 basis to enable seamless credit transfers in Turkish Lira (TRY). Developed and operated by the Central Bank of the Republic of Türkiye (CBRT), FAST aims to streamline and enhance the efficiency of electronic fund transfers within the country. The system’s design phase began at the end of 2019, with a pilot launch in December 2020 and full operation commencing in January 2021, reflecting a swift development timeline of just over a year.

Historical Background and Development

FAST was conceived as part of CBRT’s strategic initiatives to modernise Turkey’s payment systems and enhance financial inclusion. The development of FAST was driven by the need for a robust and efficient payment infrastructure that could support the growing demand for instant and continuous fund transfers. The CBRT’s role as the owner, operator, and overseer ensures the system’s smooth functioning and adherence to regulatory standards, reflecting the central bank’s commitment to innovation and financial stability.

Core Features and Functionality of FAST

24/7 Availability

One of the standout features of FAST is its continuous availability. Unlike traditional banking systems that operate within limited hours, FAST processes transactions around the clock, ensuring that funds can be transferred at any time, day or night. This feature is particularly beneficial for urgent payments and enhances the overall flexibility of financial transactions.

Proprietary Messaging Format

FAST utilises a proprietary messaging format designed to optimise the speed and efficiency of transactions. This format ensures that payment instructions are communicated clearly and quickly between participating entities, minimising delays and reducing the risk of errors.

Real-Time Gross Settlement (RTGS)

The system employs Real-Time Gross Settlement (RTGS), meaning that each transaction is settled individually in real time. This approach eliminates the risk associated with deferred net settlement systems and ensures that funds are immediately available to the recipient.

Overlay Services

FAST includes overlay services that enhance its core functionality. These services offer additional features such as request-to-pay, instant payment confirmation, and payment tracking, providing users with a more comprehensive and user-friendly payment experience.

Participation and Inclusivity

Banks and Non-Banks Participation

FAST is inclusive in its participation, allowing both banks and non-banks to join the system directly. This inclusivity fosters a more competitive and diverse financial ecosystem, ensuring that a broader range of financial institutions can offer instant payment services to their customers.

Financial Inclusion

By enabling direct participation of non-bank entities, FAST promotes financial inclusion, ensuring that a wider segment of the population has access to efficient and reliable payment services. This inclusivity is crucial for supporting economic growth and enhancing the financial well-being of underserved communities.

Impact on Domestic and International Payments

Domestic Payments

FAST has revolutionised domestic payments in Turkey by providing a reliable and efficient platform for instant fund transfers. The system supports various types of transactions, from everyday consumer payments to significant business transfers, enhancing the overall efficiency of the financial market.

International Payments

For businesses and individuals converting GBP to TRY and executing international payments to Turkey, the primary payment route typically involves the SWIFT network. However, in scenarios where the recipient’s bank does not support SWIFT payments, local routes such as FAST offer a valuable alternative.

Advantages of Using FAST for International Payments

• Speed and Efficiency: FAST’s real-time processing capabilities ensure that international payments are executed swiftly, minimising delays and enhancing transaction speed.
• Cost-Effectiveness: Utilising local payment systems like FAST can often be more cost-effective, reducing the fees associated with international transfers through SWIFT.
• Reliability: The robust infrastructure of FAST ensures secure and reliable transaction processing, minimising the risk of errors and delays.

Practical Applications for Businesses and Individuals

Domestic Transactions

FAST is indispensable for domestic transactions within Turkey, providing a reliable and efficient platform for processing everyday payments. Businesses can ensure timely payment of salaries, suppliers, and other obligations, while individuals benefit from quick and reliable payment processing for personal expenses.

International Transactions

In scenarios where the recipient’s bank does not support SWIFT payments, FAST provides an alternative avenue for seamless and reliable international transactions. By leveraging FAST’s infrastructure, businesses and individuals can ensure their international payments to Turkey are processed efficiently and securely.

Conclusion

The Instant and Continuous Transfer of Funds System (FAST) stands as a vital component of Turkey’s financial infrastructure, managed by the Central Bank of the Republic of Türkiye to ensure the smooth and efficient processing of financial transactions. From its role in handling diverse payment types to its real-time capabilities, FAST provides significant advantages in terms of speed, reliability, and cost-effectiveness. For businesses and individuals converting GBP to TRY and making payments to Turkey, leveraging FAST offers a seamless and efficient alternative to traditional international payment methods, enhancing financial operations and fostering economic confidence.