Faster bank transfers delayed to next year

The introduction of a service that will allow bank customers to make payments faster has been put back to May 2008 to allow enough time for the technology to be fully tested.

The Faster Payments system will allow bank customers to make payments in near real-time with end-to-end payments completed in a matter of hours.

It will also reduce the time for standing orders to be processed from three days to one day, provided this takes place on banking business days.

The system was originally intended to launch in November this year but the 13 financial organisations involved in the project require more time to carry out testing around accessing the central system.

A spokesman from payment trade association Apacs, which is overseeing the project, told silicon.com: "The priority really for the industry was to agree the earliest day we could launch a reliable service."

silicon.com Financial Services

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He said: "Obviously because it's going to be a system which is going to be massively important, it needs to be right and it needs to be reliable 100 per cent. There can't be any room for error.

"The industry isn't pointing its finger at any one bank or any set of banks. It was a mixture of factors."

The Office of Fair Trading has expressed its disappointment at the delay as consumers will have to wait for the improved service.

But the OFT said the stability of the UK payments systems is of "paramount importance" and should not be put at risk.

The newly created payment organisation VocaLink and 13 UK financial services organisations have been working together on the project through the joint-venture company, Immediate Payments.

The 13 financial organisations are: Abbey, Alliance & Leicester, Barclays, Citibank, Co-operative Bank, HBOS, HSBC, Lloyds TSB, National Australia Group, Nationwide Building Society, Northern Bank, Northern Rock and Royal Bank of Scotland Group.