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Great News For Banking Customers!

Banking payments association APACS today announced details of a new, faster service for telephone and Internet payments.

Back in May, the banking industry promised the Office of Fair Trading's Payments Systems Task Force that it would take steps to speed up automated payments made via the Internet or telephone. Today, APACS announced that it has successfully completed the first phase of its project to deliver a faster payments system in 2007.

Britain's banks have pledged to improve the speed and convenience of the payments service by introducing same-day payments for Internet and phone payments. Currently, if you make a payment through these channels, it takes a minimum of three working days for your money to transfer between banks.

For example, transferring money online, by telephone or by standing order between, say, your current account and a savings account with a different bank takes a minimum of three days. Alas, although money is debited from your account immediately, your payment doesn't reach its destination for three days or more, which means that you're losing out on interest. Indeed, the banks make many millions of pounds from this payment "float", but this interest should be ours by right.

At present, phone, Internet and standing-order payments account for just a fourteenth (7%) of automated payment volumes. However, these channels are growing rapidly as we turn to them instead of, for example, writing cheques. When the new system arrives, payments made via the phone or Web will take just a few hours, not days, to reach their destination.

This superior service will be available all day, every day, so you'll be able to pay bills or move money between accounts on any day of the week. However, although the processing of standing orders will move from three days to a same-day service, they will only be made on business days, which rules out weekends and Bank Holidays.

The new system is being jointly developed and provided by two firms: cash machine network supplier LINK and Voca, provider of the infrastructure for the five billion automated debits and credits we make every year (formerly known as BACS), and will be in place before 2007 is out. At present, eleven leading banks and financial institutions, accounting for all but 5% of today's existing automated payments, have signed up to the service. More firms are expected to join, or have an agency arrangement with another member, as happens at the moment.

In summary, this new system will greatly benefit customers of the UK's banks. Its introduction will mean that we'll all earn a little more interest, plus be able to make same-day payments without fuss. So, even if you pay your credit-card bill on the very last day, your payment won't be late, which means fewer penalty charges all round. Hurray!

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