For years consumer organisations as well as the Office of Fair Trading have beaten up the banks about the delay in payments reaching their destination. At last, the banks are implementing their solution.
The Faster Payments Service introduced by the banking payments service APACS will progressively take over telephone and internet payments and then standing orders so that payments reach the destination account on the same day they are sent.
The banks proved the point by sending their own donation to the Myanmar disaster appeal as one of the first transactions through the system on May 27. Like you, I have often been annoyed to find that a payment I made from my current account took three or four days to turn up at the other end.
We expect speed in the internet age
The volume of such complaints has escalated with the internet, since many people like me have an online current account with one bank and an online savings account with another one, and get fed up with seeing three days’ worth of interest disappear every time we make a transfer.
The banks point out that internet and telephone transactions account for just 2% of all banking transactions and standing orders for another 6% - the remaining 92% are bulk transactions like payrolls and direct debits for which current technology works fine.
But the banks admit that both telephone and internet transactions are expected to mushroom over the next few years, and the new system at last gets the banks into the internet age. Cheques aren’t included since the rules for handling them were updated last year.
The Terminal 5 of banking?
The 13 banks included in the scheme are Abbey, Alliance and Leicester, Barclays, Citibank, 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).
Each of these banks has different timescales for introducing the same-day transfer service since all are keen to avoid a ‘Terminal 5’ moment. From May 27, HSBC, Barclays, NatWest and HBOS started with one-off payments. In many cases the limits are starting low at £100 or less but will progressively move up until you can make £10,000 same-day transfers. Here are some milestones:
-HSBC will start £10,000 same-day transfers on June 3
-Barclaycard will join the service between July and September
-Natwest and Lloyds TSB start faster standing orders from June 6
-Barclays and HBOS move to faster standing orders in August-September
-HSBC credit cards join the scheme in November
You can use this checker on the APACS website to find out whether you can make a faster payment to an account by entering its sort code.
Unfortunately, many of the banks with the highest-paying online savings accounts aren’t on the list of participating banks who coughed up the £30 million to implement the scheme. They may join in due course but for now, if you want same-day transfers, you’ll have to stick to the banks listed above.
