Faster payments scheme begins today

27 May 2008

APACs launches scheme for faster bank transfers

A banking scheme to facilitate one-day telephone and internet cash transfers has gone live today.

The new service will speed up the process of transferring money between banks which previously took as long as four days.

In 2007, banks made an estimated £30m in interest from the delayed transfers.

The Faster Payments Service, which cost £300m and was developed by 13 banks, was originally scheduled for launch in November of last year, however it was delayed to ensure the service was fully functional.

The system will be implemented using a ‘phased approach’ with banks today beginning to offer customers the faster payments service. By the end of this year the majority of all UK payments made by internet, phone or standing order will be made using the new system.

From today, customers can make one-off payments up to a maximum value of £10,000 using the internet or phone, which will be taken from their account and arrive at the payee’s account on the same day.

The same-day service will apply to standing orders from 6 June.

To prepare for the Faster Payments Service banks have been testing its efficiency by making hundreds of penny payments.

Paul Smee, chief executive of the UK payments association APACs, said: “The final part of this enormously complex project has been to test the new system in a live environment.

“After such substantial investment by the industry we would like, in time, to see the new Faster Payments Service being used for all of the UK’s internet, phone and standing order payments.”

The 13 banks involved in the scheme are: Abbey, Alliance and Leicester, Barclays, Citi, Clydesdale and Yorkshire Banks (National Australia Group), Co-operative Bank, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Northern Bank (Danske Bank), Northern Rock and Royal Bank of Scotland Group (including Natwest and Ulster Bank).

Consumers can check if a bank is set up to receive faster payments by visiting www.canipayfaster.co.uk and entering in the receiving account’s sort code.

Related Article: 27/02/08 - 'Payments will be faster from May'