Banks agree same day payments

Standing orders, telephone and internet bank payments will soon be cleared within one day, the payment systems task force has said today.

16:50 24 May 2005

Standing orders, telephone and internet bank payments will soon be cleared within one day, the payment systems task force has said today.

It currently takes between three and five days for electronic payments to reach their intended recipients, earning banks approximately 30 million a year in interest.

But under the new time scale, payments made before noon would reach their destination on the same day, with those made afterwards cleared by the following morning.

However, the agreement does not cover cheque payments and banks have warned that the system will take at least two years to introduce.

"This is good news for bank customers, both personal and business," said task force chairman Jonathan May.

"Telephone and internet payments and standing orders should all be speeded up and the money could be available to the recipient on the same day."

While consumer groups praised today's agreement, they questioned the delay and the omission of cheques.

National Consumer Council chief executive Ed Mayo said: "Consumers' patience is fast running out and could be totally exhausted by the time these plans come to fruition.

"These changes must be introduced as quickly - and cheaply - as possible. The two-year deadline for the banks to introduce next-day payments, once the implementation group has agreed the way forward, looks over-generous."

The task force said today that it expects to set up a working group to examine issues relating to cheques starting in October 2005.

Paul Smee, chief executive of Apacs, the trade association for the UK payments industry, described today's announcement as a "positive move".

"The task force has worked extremely effectively bringing together diverse interests for the benefit of consumers - we look forward to the continuing challenge of delivering real change to customers," he said.