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The banking industry announced on 14 August last year that the new faster payments service would be introduced in May 2008, six months later than expected.

The Office of Fair Trading (OFT) said at the time that it was disappointed with the delay, which happened despite a commitment by the banking industry to have the new system in place by the end of November 2007 as agreed by the Payments Systems Task Force.

APACS, the UK payments association, said this week that the development of this new system was a massive and complex project involving significant investment both within banks and the central infrastructure.

The new service will benefit customers by speeding up one-off payments made over the internet or by phone, enabling them to be made all day every day. They currently take three days.

It will also enable regular standing order payments to move more quickly on bank working days, reducing the timescale from three days to provide a same day service.

The new system will run alongside existing UK electronic payment schemes such as Bacs and CHAPS.

As the launch of the new system approaches, further updates and information will be provided and clear information made available to customers about the impact this will have on them.

The thirteen founding members of the service account for over 97 per cent of all payments made in the UK.

Currently internet and phone payments account for just 4 per cent of automated payment volumes, but these are growing rapidly as customers increasingly turn to them instead of more traditional payment methods such as cheques.

Standing orders account for 9 per cent of automated payments. The new system is being built to cater for the large volume increases projected for the future.

The remaining 87 per cent of automated payments are 'bulk' transactions generated by organisations and businesses both large and small and are: Direct Debits, used to pay utility bills, life and general insurance premiums and various subscriptions; Bacs Direct Credits, used for salary payments, pensions, and state benefits and CHAPS payments.

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Related links

• APACS
• British Bankers' Association