Banks and Building Societies yet to get up to speed with Faster Payments

It has now been over 18 months since the launch of the Faster Payments Service, the UK banking initiative created to reduce the time taken to transfer money between customers’ accounts at different banks from three working days to near real-time.

Twelve banks and one building society initially committed to use the service and this number has risen slowly since. As of November 2009 however, many of the largest banks and building societies have made little progress in offering same day payments to their personal customers. This means that nearly half of all eligible payments are still taking three or more days to process via Bacs. Many of the banks impose an upper limit on the value of Faster Payments that is considerably less than the maximum of £10,000 defined by the scheme. This means that uptake of the service has been limited.

Not every account can be reached by the new scheme. Of the 16,588 unique sort codes in the UK 11,425 can now accept Faster Payments. Since June 2008, 505 additional sort codes have been added to the scheme and 268 have left it.

Jon Williams Director of Strategic Development at Experian Payments comments: “I believe we shall see the new corporate proposition for Faster Payments Direct Corporate Access further increase the volume and the demand for the new service as businesses feel competitive pressure to make their payments faster, especially to consumers. I think the next 12 months will see more acceptance of Faster Payments by the non-members, the agency banks and more volume from existing and new banks with an increase in the value limits that some banks have imposed.”