Waiting for payments to clear should be a thing of the past from 2007 as banks have agreed to implement same-day clearing on telephone and internet transactions.
In his capacity as chief executive of the Association of Payment and Clearing Services, former director general of the Aifa Paul Smee has confirmed a new system will be implemented by the end of 2007 allowing UK internet and phone banking transactions to be cleared in the same day, as well as standing orders, rather than within the current standard of three days, once a new technology system is implemented.
While the majority of UK payments (93%) are already processed within the same day – through bulk transactions such as direct debit and BACS payments – the number of people choosing to process payments through the internet and phone is increasing, over the traditional route of paper cheque payments.
“Back in May we pledged to speed up Internet and telephone payments but the UK banking industry has now decided to go a giant stride beyond this to give customers a service whose speed and convenience is world class,” says Smee.
“Our new system will enable customers to use the internet or phone to make a payment that will reach the recipient’s bank account within a few hours. Crucially, the service will also be available all day, every day and means that customers will have the flexibility and convenience of moving money between accounts or paying bills on the same day within a few hours and on any day of the week. Successfully delivering this new system by 2007 is going to be extremely challenging but the industry is confident it will be achieved," adds Smee.
So far, 11 banking institutions have agreed to sign up to the new payment system which is being developed by Link and Voca, following discussions with the Office of Fair Trading earlier this year.
Banks in Sweden already operate a same-day clearance service and in some cases pay compensation if funds are not delivered by 2pm.IFAonline
'Right thing to do'
£69m spent on upgrades
European fintech market 'underserved'