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What is Single Immediate Payments

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedOct 20212 min read

When researching the best payment methods, you’ll come across plenty of terminology to describe the different forms and types of transactions. One such term is single immediate payments, which are also known by the acronym SIP.

These are in fact part of the umbrella term Faster Payments, which is a way of referring to the different processes that make it possible to instantly send money from one bank account to another. Faster Payments are electronic transfers used for everyday transactions, and include single immediate payments, forward-dated payments, standing orders and direct corporate access payments. Keep reading to find out about SIPs and how they work.

What is SIP?

As previously mentioned, a SIP is a way of making rapid transfers between bank accounts. But what is SIP, precisely? Well, it is the most common form of Faster Payments and can be used to send money 24 hours a day, 7 days a week. This can be carried out via mobile banking, online banking or even in branches, and there is a payment limit of up to £250,000 per transaction.

Put simply, simple immediate payments are the most basic transfer type, involving a single transfer of funds between two specified accounts. In order to carry this out, customer authentication and authorisation is required, which is carried out through the use of tokens.

Tokens are a form of payment technology that protect the user’s sensitive information. Details such as account number, sort code and address are represented through the use of secure, algorithmically generated tokens that can then be passed through online payment processes without actually revealing the bank details. This offers an extra layer of protection against fraud, which becomes increasingly important as more and more payments are processed digitally.

Do I need a specific SIP account?

Most banks will support the use of this technology, so there’s usually no need to open a specific SIP account. To initiate single immediate payments for your business, you can use an API to fetch a list of banks and their supported capabilities. The API should then allow you to filter the results to show only those banks that support SIPs so that you can make the appropriate choice.

How do SIPs work?

Now that you know the definition of a SIP, you might be wondering how the process works.

First of all, the payment should be either initiated by the customer or requested by the recipient of the funds. For customers to make these payments, they should use online banking, a mobile device, phone banking or make a visit to a branch.

If a company is requesting payment, they should provide details of the payer’s bank, details of the receiving account, the exact payment amount and a payment reference for records. In order to do this, the customer’s details must be requested through the payment processor, and the customer may be redirected to their bank in order to authorise the transaction. They will then be returned to your site or application to confirm the order.

The central Faster Payments system should provide a response to the payment within around 15 seconds, confirming whether it was authorised or rejected. A reason will also be given if the providing bank has rejected the payment.

Are there any limits to SIPs?

One of the fastest and most convenient payment methods are SIPs, meaning it’s a great option for all kinds of transactions. There are not many limits, as the payments can be sent at any time of day or any day of the week (although this may be subject to your bank's particular service offering). Payments of up to £250,000 can be made via SIP.

Sometimes the payments cannot be taken by the receiving bank immediately, possibly due to operational issues or when receiving accounts do not permit immediate posting of payment. In this case, the receiving bank should notify the user of when the funds are expected to arrive in the account.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.