Payments limbo to shrink, slowly
APACS, the UK trade association for payments and for payment service institutions, announced last week that the Faster Payments Scheme required in 2005 by the Office of Fair Trading (OFT) will begin to be introduced from next Tuesday, 27th May.
The institutions involved are Abbey, Alliance & Leicester, Barclays, Citi, Clydesdale & Yorkshire, Co-op Bank, HBOS, HSBC, Lloyds TSB, Nationwide, Northern Bank, Northern Rock and RBS Group, including NatWest and Ulster Bank. They have spent £30 million on the scheme.
The 3-4 days it takes to transfer money from one bank to another has long nurtured the belief among customers that the banks were “playing the float” and making interest on transfers while they were in limbo. The OFT estimated the banks made £30 million a year from it.
APACS thought that an overestimate, but undertook to speed the process up. The new scheme will permit customers to make payments up to £10,000 via telephone or internet. Most transactions will complete in under two hours, some in only 30 minutes.
Same-day standing orders are supposed to start on 6 June. Direct debits did not go into limbo and so are not affected by the new scheme.
Banks have announced a wide range of schedules to introduce the scheme, ranging from NatWest, which will launch the scheme in full on the dates specified, to HSBC, which will not introduce the scheme for standing orders until the first half of 2009.
Customers unsure about whether a payment will happen on the same day can check the recipient’s sort code on the APACS sortcodechecker.
