Finally, faster inter-bank money transfers are a reality
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After many complaints from customers banks are beginning the process of speeding up money transfers between banks. The Office of Fair Trading (OFT) has long been pressurising banks on this matter, sharing the belief of many that in the age of the computer there is no need for transfers to take up to five days to clear.
The suspicion has long been that the banks are unwilling to speed up the process because while the money is in transit the banks still earn money on it but do not have to pass that on to the consumer. More than £30 million a year was believed to be earned in this way.
In 2005, the OFT said that the system should be made more efficient and 13 banks embarked on an overhaul, which they estimate is costing them £300m.
Under the Faster Payments Scheme, customers can make one-off payments up to a maximum value of £10,000 over the telephone or via the internet, which will leave their account and arrive at the destination account on the same day.
The system will operate 24 hours a day, seven days a week. Most transfers will
actually be made in under two hours, with some in just 30 minutes.
However, the ‘big five’ banks have warned that while some faster payments will start on the first day, some customers will not see standing orders sped up until early 2009.
Customers who are unsure about whether a payment will happen on the same day can enter the recipient’s sort code into a checker on the Apacs website (www.apacs.org.uk/sortcodechecker).
Direct debits did not have the same payment black hole and so will not come under the remit of the Faster Payments Scheme.
The 13 banks included in the scheme are: Abbey, Alliance and Leicester, Barclays, Citi, Clydesdale and Yorkshire Banks (National Australia Group), Co-operative Bank, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Northern Bank (Danske Bank), Northern Rock, and Royal Bank of Scotland Group (including NatWest and Ulster Bank).
None of the banks have said they will be charging personal customers for the service,
although it is not yet known whether business customers will be charged.
Rules on cheques, meanwhile, will remain the same. Since November, interest must be credited no more than two days after a cheque has been paid in and the money must be available to be drawn out after no more than four days. After six days, a cheque is deemed to have cleared absolutely and so banks cannot recoup money from a customer’s account if they discovered the original cheque payment was fraudulent.
