Cash transfers between banks set to speed up

UK banks are to speed up electronic transfers between accounts by the end of 2007, with the aim of clearing payments in less than 24 hours.

The Payment Systems Task Force (PSTF), chaired by the Office of Fair Trading, announced in a report released this week that banks will have two-and-a-half years to implement the change.

UK payment association Apacs will lead an implementation group made up of UK banks that will determine and deliver the central system for the service.

Its first task, to be completed within six months, is to decide and agree on the technology platform and establish the payment timescale banks will aim to meet.

Once that is decided, banks will have two years to implement the necessary changes to their computer systems.

'In our experience, any major change generally takes about two to three years. It's not just about the platform at the centre, but making the myriad banking interfaces compatible,' said a spokeswoman for Apacs.

The key challenge for this first phase is to ensure the technology is suitably robust, secure and efficient, with the capacity to meet longer-term requirements, and to seek agreement with the participating banks.

'The advent of the internet has brought with it a growing expectation that online payments should move speedily, at the touch of a button. So the timing for this massive change and investment is just right,' said Apacs chief executive Paul Smee.

The PSTF also expects to set up a working group to examine issues relating to cheques, starting in October.

Banks say the current payments process is embedded in numerous legacy systems, with any modifications requiring a significant number of changes (Computing, 22 July 2004).