Faster payments service launch to be delayed beyond November

The banking industry today announced an update on its objectives to deliver a new faster payments system in the UK and changes to the cheque clearing processes which will provide certainty and increased transparency for customers accepting cheques.

The testing of the Faster Payments service has proved more complex and time-consuming than originally expected, so its introduction will not now be happening this year. The Office of Fair Trading has been informed. A thorough re-plan is now being undertaken so that the industry can announce a revised launch date by mid-August.

The changes to the cheque clearing processes are on track to provide customers with added certainty in November.

Paul Smee, APACS Chief Executive said, "The UK banking industry is disappointed that we won't be able to deliver the new faster payments system as quickly as we had planned, but there is no room for error when launching a system which forms part of the UKs economic infrastructure. Clearly, it is more important to make sure it is done with our total confidence than rushed to meet a self-imposed delivery date. This is a huge project; the investment by UK banks in the central system and in adapting their own systems has been high and is continuing; the new service to be delivered in 2008 is ambitious, innovative and exciting for users.

This new system is being built for longer-term needs rather than short-term requirements: web, phone and standing order payments currently make up only 8 per cent of automated payments. Customers should not be inconvenienced by this delay, as clearly they can continue to make these types of payment using existing systems.

Todays announcement will not impact the UK banking industrys ability to deliver changes to the cheque clearing process. This project remains on track to deliver at the end of November this year and will provide increased transparency and certainty. The key benefit is for customers who accept cheques. For the first time a customer can be sure that after six working days funds cannot be reclaimed as may have happened in the past - typically if the cheque turns out to be fraudulent or if it turns out there are insufficient funds in the payers account.