By Andy McCue, 19 December 2005 14:00
NEWS
UK banks have pledged to cut the time it takes to process transactions and introduce a same-day service for internet, phone and standing order payments by the end of 2007.
The move will finally bring the UK financial sector in line with the rest of Europe in reducing the current three-day clearance time for electronic banking payments.
Earlier this year the Payments System Task Force, chaired by the Office of Fair Trading (OFT), gave the banking industry and UK payments body Apacs six months to come up with a plan to speed up payment processing.
Apacs has now said the new system will be introduced by the end of 2007 and that 11 institutions, accounting for more than 95 per cent of today's automated payments, have committed themselves to the plan.
Cash-machine network operator Link and electronic payment processing firm Voca will jointly develop and provide the new system.
Internet, phone and standing order payments currently account for only seven per cent of total automated payment volumes but these are growing rapidly as people use cheques less and less.
Paul Smee, CEO of Apacs, said the new system will enable customers to use the internet or phone to make a payment that will reach the recipient's bank account within a few hours.
He said in a statement: "Crucially the service will also be available all day, every day and means that customers will have the flexibility and convenience of moving money between accounts or paying bills on the same day within a few hours and on any day of the week."
John Fingleton, OFT chief executive, said in a statement: "This is really good news for both personal and business bank customers. The banking industry has met all the criteria set for it."
Comments
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1. Mike
When will we be able to transfer Euros easily & cheaply. I needed to transfer 30 Euros to an account in Germany and my bank wanted to charge me 30 Euros on top plus the exchange commission.
What is the use on an international account number when this happens.
(Oh and I forgot the form in quadruplicate to be filled out).
2. anonymous
About time too.
I have never understood how someone can debit my account same day, yet I am unable to credit within the same timeframe.
I think it is because the banks put the money in 'suspense' accounts, which the invest on the money markets over the (three to ten day) period required for cheque clearance.
However, as this money making loophole is closed, I can see the banks wanting to recoup their lost money some other way.......
The customer will eventually pay.
3. anonymous
As anoymous says, the 3 days is complete rubbish. My dad worked on an electronic banking system, paid his credit card with it. The credit card company tried charging him 40 pounds interest for it not being in on time. When he pointed out that he designed the system it was paid with and that the money was in their account, they suddenly decided not to charge the 40 pounds interest.
4. Drew Edgar
So the government "kicks butt" & finally the banking cartel in this country addresses its prevaling strategy of self interest and contempt for customer requirements.
Perhaps we may even see the sort of customer focussed banking service which senior subjects of the Crown enjoyed 25 or so years ago, or am I dreaming?