Same day clearance still a dream for many
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A new study in the UK has demonstrated that a year after the launch of same day bank transfers, nearly half of eligible payments still take three or more days. Several banks and the largest building society have made little or no progress in offering same day clearance.
Same day clearance of funds was introduced via the Faster Payments System in May 2008. Twelve banks and one building society signed up as founder members.
Seven of the founder members are currently offering a partial service or no service at all. These include some of the country’s largest banks, such as Abbey and Lloyds, and the biggest building society, Nationwide.
Abbey says it has been focused on the merger of its technology with its new parent, Spanish bank Santander. The bank says it aims to be operating at 35% capacity by June 2009.
Lloyds did offer an online same day transfer service, but it has withdrawn it. It told the BBC in January the system would be running again in the spring, but now estimates it will not be back up until December 2009.
One of the main reasons for money not going through on the same day is that many of the banks impose an upper limit on the value that can be transferred by the system.
Nationwide only offers Faster Payments on amounts of £10 or less, which is ludicrously low and may explain why it is only processing 1% of transfers through the system. The Alliance & Leicester, Lloyds and Halifax also have thresholds considerably less than the industry limit of £10,000.
There has been even less progress on the sending of other types of payment through the system.
The majority of the 13 founder members of Faster Payments do not allow customers to settle their credit card bills through the system. This includes large banks such as HBOS, HSBC and Lloyds.
And standing orders, typically set up to donate to charity, are not permitted as Faster Payments by nearly half of the founders.
Some banks are providing a full service. These include RBS Group (including RBS and Natwest) and Barclays.
The body which runs the clearing system says it is working, but customers who leave their banks in frustration are doing “the right thing” and I would underline this point. The only way customers can have power over the banks is through withholding our custom from them if they do not provide an adequate level of service.
As I have recommended before, people should never be afraid of switching banks. Pay attention to the latest deals and types of account. I wouldn’t recommend switching on the basis of just one issue such as this one, but if you have weighed up the pros and cons then go ahead, switch to something better.
