The £300m Faster Payments (FP) banking service has gone live today - but not all the participating banks will be able to send and receive payments via the system from launch.

Under FP, banks will aim to reduce the clearing period for transactions made over the web or phone from three days to a few hours. The two channels account for approximately four per cent of current automated payments.

Out of the 13 banks joining the scheme, Barclays, Citi, HSBC and RBS are among the institutions capable of sending and receiving payments at its launch.

Other firms including Nationwide and Northern Rock will start off with a limited service offering and will only be able to receive payments. Meanwhile, banks such as The Co-operative Bank and Abbey are behind in the implementation schedule and do not expect to offer the service at all in the next few weeks.

FP was originally set to go live in November 2007, but was postponed to May 2008 after supplier VocaLink failed to meet the testing schedule.

Critics have questioned the scheme because of the limited time for performing the necessary security checks on transactions, but banks expect that an initial transaction cap of £10,000 and a phased implementation will help mitigate fraud and settlement risk.

“The industry is not going for a big bang approach and we will deliver this project in stages, just as we did with chip-and-PIN,” said a spokeswoman for payments association Apacs.

“Not all customers will be able to send and receive payments under the timescales that have been talked about from day one,” she said.

Though FP offers a cheaper payment method than other existing schemes such as Chaps, banks believe that heavy investment made in IT to support the FP scheme will help profits.