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In a statement, the Office of Fair Trading (OFT) said that it is disappointed that the introduction of the faster payments service has been delayed until May 2008. This is 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, according to the OFT.

The banks said that "faster payments service will mark a significant and innovative change in how payments in the UK are made".

"The work so far has involved massive investment in terms of both time and money to create a new central infrastructure as well as banks’ own systems being upgraded to deliver faster payments for online, telephone and standing order transactions. The revised timescale will allow sufficient time for the further rigorous testing required at both the centre and by banks to ensure customers can benefit from safe and secure faster payments."

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 infrastructure for the new faster payment service has been developed by VocaLink to deliver real-time payments to the UK, following an agreement between the banking industry and the OFT's payment systems working group. It is designed to let customers use the internet or phone to make a payment that will reach the recipient's bank account within just a few hours.

The new system has 13 financial institutions signed up as founding members, with others able to join or access the system through agency arrangements with a founding member. Each member bank will decide when to introduce the service to corporate and personal customers.

The Association for Payment Clearing Services (APACS) has explained to the OFT the reasons for the delay and the OFT said it agrees that the stability of the UK payments system is of paramount importance and should not be put at risk.

The OFT said it will continue to liaise with APACS in the coming months on this matter.