Out-Law News | 19 Dec 2005 | 6:44 pm | 1 min. read
At present, internet and phone payments take three days to complete, and financial institutions have been criticised over the length of time involved. The delay nets banks a reported £30 million per year from interest earned on the transferring money.
The Office of Fair Trading’s Payment Systems Task Force issued a report into the practice in May, following which APACS agreed to set up a system that would increase the speed of payments.
The industry association announced on Friday that it had completed the first phase of the project. The new system would allow payment transfers to take place within hours of being instructed, it said, and would be available on a 27/7 basis.
The new system would also enable standing order payments to move more quickly so that money would move from the payer’s account on the due date and arrive at the beneficiary’s account on the same day, said APACS. This service will only be available on and within banking business hours.
Eleven financial institutions, accounting for over 95% of today’s existing automated payments, have signed up for the project so far.
“This is really good news for both personal and business bank customers,” said OFT Chief Executive John Fingleton. “The banking industry has met all the criteria set for it. I am particularly pleased that the near real time service, available 24/7, to be introduced by the end of 2007, goes even further than the Task Force recommended. ”
The new system will not affect traditional payments made using cheques.