OFT welcomes details on faster clearance on electronic payments

230/05    16 December 2005

Detailed proposals to reduce clearing times for electronic banking payments have today been welcomed by the OFT.

APACS has told the Payments System Task Force, chaired by the OFT, that the new system will mean customers can make payments by the phone or internet and the money will be transferred within hours, on any day of the week, rather than the current three working day system. Under the new system clearing times for standing orders are also reduced from three days to same day.

In May this year an industry implementation group made a commitment to reduce electronic clearing times to the Task Force and was given six months to produce proposals (see press release 94/05).

John Fingleton, OFT Chief Executive, said today:

'This is really good news for both personal and business bank customers. The banking industry has met all the criteria set for it. I am particularly pleased that the near real time service, available 24/7, to be introduced by the end of 2007, goes even further than the Task Force recommended. This shows just how well this sort of collaborative approach between industry, consumer and business bodies and Government can work. I am very pleased to welcome these developments.'

NOTES

1. The Payment Systems Task Force was established in 2004, to identify, consider and seek to resolve competition, efficiency and incentive issues relating to payment systems over four years, particularly looking at network effects of the existing payment mechanisms. The Task Force meets not less than four times a year, and reports on its work and findings annually. Working groups have been established to take forward work on various issues. The Task Force publishes a report at the conclusion of each working group.

2. The members of the Payment Systems Task Force: Office of Fair Trading (Chair), APACS (Association for Payment Clearing Services), BACS Payment Schemes Limited, British Bankers' Association, British Retail Consortium, British Chambers of Commerce, Building Societies Association, CHAPS, Cheque and Credit Clearing Company Limited, LINK, Visa, MasterCard, S2, Federation of Small Businesses, National Consumer Council, Which?, The Bank of England (sitting as observers), and HM Treasury (sitting as observers). Individual banks are members of the Task Force's working groups.