A faster banking system that will enable same-day money transfers made by telephone and over the internet has been delayed until next May!
It was supposed to be introduced this November, and enable payments to reach our accounts within a few hours. At the moment, phone or internet payments takes 3 days to complete, the same time needed for cheques (and most of us know it really doesn't take that long!)
The faster service comes 2 years after banks were warned by the Office of Fair Trading for the time they take over electronic payments, from which they make about £30m a year in interest!!
So could the delay be because the banks would end up making less profit from holding onto our money longer?
Not according to the banks of course. The Association of Payment Clearing Services (Apacs) blamed the fact that it was a huge project, with an estimated development cost of £300 million.
"The UK banking industry is disappointed that we won't be able to deliver the new faster payments system as quickly as we had planned," said Paul Smee, the Apacs chief executive. "But there is no room for error when launching a system which forms part of the UK's economic infrastructure. Clearly, it is more important to make sure it is done with our total confidence than rushed to meet a self-imposed delivery date."
Web, phone and standing order payments currently make up only 8% of automated payments, according to Apacs, but the new infrastructure is designed to cope with rapidly-growing demand.
Apacs said it had explained the reasons for the delay to the OFT, which said it "agreed that the stability of the UK payments system is of paramount importance and should not be put at risk".
"The OFT believes that faster funds transfers will help consumers manage their finances better, including making it easier to avoid unauthorised overdrafts and getting a better deal on interest rates," the consumer watchdog added.
The hold up on the new system will not affect Apacs' delivery of the changes to the cheque clearing process, the OFT insisted.
From November, any cheques will be cleared once and for all after 6 days, unless the bank or other financial institution suspects that fraud is involved.
Currently, cheques can be rejected by a bank at any time if fraud comes to light - possibly many weeks or months later, even if the person paying in the cheque has acted honestly, withdrawn the money and then spent it.
So,do you believe that the hold up with the new payment system is genuinely to do with wanting to get it right first time?
Or do you think it's just another stalling tactic from the big banks, designed to make even more money from us?
What do you think?
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