New system to cut payment clearing

30 November -0001

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It's expected that UK bank customes will be allowed to access funds transfered from another account within a few hours by 2007.

The Association of Payments and Clearing Services (APACS) has announced that the new system will be in place by the end of 2007 and will include internet, phone and standing order payments, but not cheques.

The new system will mean that the UK is finally in line with the rest of europe for clearing electronic payments. The current time is around three days.

The Office of Fair Trading's task force issued a report into the practise, and APACS followed that with the announcement that they would introduce a systen to speed up payments.

The new system will allow payment transfers to take place within one day, and on a 24 hour basis. According to the association, the first phase of the project is complete.

Eleven financial institutions, accounting for over 95% of today’s existing automated payments, have signed up for the project so far.

“This is really good news for both personal and business bank customers,” said OFT Chief Executive John Fingleton. “The banking industry has met all the criteria set for it. I am particularly pleased that the near real time service, available 24/7, to be introduced by the end of 2007, goes even further than the Task Force recommended. ”

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