The UK banking industry has bowed to regulatory and consumer pressure and agreed to speed up online funds transfers.
The banks have agreed to provide same day or next day clearing for transmitting interbank payment orders following telephone or Internet instructions from customers, as well as standing orders. The move follows an Office of Fair Trading (OFT) investigation into bank payment practices, following complaints from consumers about the current three-day cycle.
UK payments body Apacs will co-ordinate the effort on behalf of the banks and has timetabled a six-month consultation process and two-year implementation deadline. Options on the table include speeding up Bacs payments or modifying the Chaps large value network to handle smaller transactions
Paul Smee, Apacs' CEO, believes the timing is right for change. "This new service will not only impact Internet payments but also phone and standing order payments. These together accounted for 7% of all automated payments last year. Whilst this figure is low, in a few years’ time as online banking continues to grow, customers will want to make more of these payments."
Issues relating to the five-day-plus clearing time associated with cheque payments will be dealt with by a seperate OFT investigation commencing in the autumn.
Other payment methods that the Task Force will look at include Link (the UK's ATM network), MasterCard and Visa and Maestro/Switch (the UK's payment cards networks), and the Chaps clearing scheme, as well as generic issues such as pricing, transparency and innovation.