What is the role of directories in Faster Payments?

Directories play a significant role in Faster Payments by simplifying the payment routing process. They facilitate the use of aliases, which can include email addresses, phone numbers, or other identifiers, allowing individuals or businesses to initiate payments without needing to share sensitive information such as bank account numbers. This enhances user convenience and security by allowing payments to be sent using easily recognizable identifiers rather than complex banking details.

By using directories, payment systems can quickly match these aliases with the corresponding financial institutions and account information, streamlining the transaction process. This reduces friction in payment initiation, making the system more user-friendly and promoting the adoption of Faster Payments. The ability to use aliases helps bridge the gap between various payment systems, contributing to a more cohesive and accessible payments ecosystem.