The Office of Fair Trading (OFT) has welcomed detailed proposals from the Association for Payment Clearing Services (APACS) to reduce clearing times for electronic payments.
It currently takes around three days for electronic money transfers to move funds from one account to another by standing order, telephone or internet transfer. The delay, as funds leave the payee’s bank account but do not reach the recipient’s until a few days later, is estimated to earn the banks millions of pounds in interest every year.
UK banks have now promised that they can implement a new system across the UK by November 2007. A plan on how this will work is expected to be unveiled later this year.
The new system will mean that those making payment by telephone or internet will see their money transferred within hours, on any day of the week (24/7), rather than the current three day system. The clearance time for standing orders will also be reduced from three days to the same day, when standing orders are made on and within banking business days.