Faster payment scheme slows down

Original deadlines too tight

Faster payments have been delayed

The £300m technology programme to cut banks’ three-day clearing periods is running six months behind schedule.

The faster payments scheme will now not be introduced until May 2008, according to Apacs, the banking industry body that is co-ordinating the project.

‘It is a massive undertaking and we do not want to go ahead if it is not going to be 100 per cent reliable,’ said a spokesman for Apacs.

The multimillion-pound central system is being developed by electronic payment specialist VocaLink with the backing of 13 clearing banks including all the big high-street names.

The scheme, which will introduce real-time transfer of phone, internet and standing order payments instructions, was supposed to be introduced in November.
But banks had to scrap that launch date after VocaLink missed deadlines to provide a working system for testing.

Industry sources blame the delays on the unrealistic schedule imposed by the Office of Fair Trading (OFT).

‘The initial deadlines were too tight for such a huge project that involved the collaboration of 13 different banks and a supplier,’ said a banking industry source.
The tight timetable reflects the importance of faster payments for banks’ customers, according to the OFT.

‘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,’ said a spokesman.

The faster payments programme was created by the OFT in 2005 after a task force estimated banks were making £30m every year by not paying interest on money floating between accounts.

Only the plans to speed up electronic transfer times will be affected by the delays. Improvements to the cheque clearing process are still on course to be introduced in November, says Apacs.