Banking industry reports progress on new faster internet and phone payment service
- New central system on track to be in place from November 2007
- Thirteen financial institutions* confirmed to be founding members
To coincide with today's (Monday 12 February 2007) publication of the OFT's final Payment Systems Task Force Report, the UK banking industry today confirms that they are on track to introduce the new faster payments system, agreed with the Task Force, by November 2007. They also announced that there are thirteen founding members* of the new system.
This system will put the UK up with the frontrunners of similar systems around the world. UK customers choosing to make a faster online or phone payment will be making it in near real-time – which means the payment will complete end-to-end within a couple of hours. It will also enable standing order payments** to move more quickly.
There are thirteen founding members*;however, other financial institutions will be able to join or access the system for their customers through agency arrangements with a founding member. Although the central system will be ready in November 2007 it will be up to each bank or building society to decide how and when it delivers a full service to all its personal and corporate customers.
Paul Smee, Chief Executive of APACS said:
“Building a new payments system of this scale is a mammoth task: this is a multi-million pound project to deliver a state-of-the-art system that will speed up phone, online and standing order payments . Central testing of the new infrastructure has already started and although in its early stages, is going well. In saying that, meeting our November target is still enormously challenging because all thirteen members have to link to the system and carry out further tests to ensure the new system will be safe, efficient and robust.
“This service will be great for any customer wanting to move money quickly – perhaps to pay a bill or move money between accounts. Like the internet, it will be available all day, and will move a payment within a few hours and on any day of the week.”
Further updates will be provided and clear information made available to customers about the impact this will have on them.
* The thirteen founding members are Abbey, Alliance & Leicester, Barclays, Citibank, Co-operative Bank, Danske Bank , HBOS, HSBC, Lloyds TSB, National Australia Group, Nationwide Building Society, Northern Rock, Royal Bank of Scotland Group. They account for over 95% of all payments made in the UK .
** The new system will also provide a same day service for standing order payments, (which currently takes three days) but these will still only be made on and within banking business days. This will address the concerns raised by the OFT by eliminating 'float' from standing orders (the interest accruing to banks when the money has left the payee's account but hasn't yet reached the recipient's);and will resolve timing issues relating to availability of funds for customers (that is, the payer will no longer need to have money in his or her account two working days before funds are paid to the beneficiary.