Faster Payments delays costing up to £82m

Office of Fair Trading praises reliability of banking service but criticises slow pace of rollout

Faster Payments speeds up online money transfers

Only 69 per cent of money transfers that could be processed using the Faster Payments system between banks are being completed using the service, according to the Office of Fair Trading (OFT).

And the slow rollout is costing up to £82m in lost benefits from the scheme, says an OFT review.

Faster Payments was designed to speed up the electronic transfer of money from standing orders and telephone and internet banking transactions, improving from the old three working day timescale to a near-instant electronic process.

The system went live in May 2008 – six months after its original November 2007 target – and is delivering real benefits and working reliably, says the OFT.

But it will be at least June this year before all payments that could be made using the service are completed through the system – more than a year after going live.

“Faster Payments moves the UK from being one of the slowest clearers of this kind of payment to being one of the fastest,” says the OFT report.

“But shortcomings have become obvious in the ability of the Payments Council both to ensure delivery of a large-scale payment project to timetable, and to ensure that its members pass on the benefits to their customers within a reasonable timescale.”

The OFT said that the expected benefits from introducing Faster Payments will be between £468m to £1.4bn over 10 years. But the delays in its first year of operation mean a “conservative estimate” of lost benefits worth between £38m and £82m.