Payment systems need further improvement - Money - News - Moneyfacts


Payment systems need further improvement

Payment systems need further improvement

Category: Money

Updated: 26/03/2009
First Published: 25/03/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The time it takes for electronic bank payments and cheques to clear has been reduced but further improvements are needed, the Office of Fair Trading (OFT) has announced.

The judgement came in the OFT's review of the Payments Council, which has been charged with making the payments industry work for consumers and businesses since it was established in 2006.

It has been estimated that banks earn up to £30 million a year by holding onto their customers' money while it is being transferred.

The Payments Council introduced the Faster Payments Service last year, which was established to allow consumers to make and receive payments within a matter of hours rather than having to wait for days.

However, the service has been found to be operating at just 69 per cent capacity across its member banks, while the Council's progression has been judged as disappointing in some areas, particularly in driving improved payments for customers.

The Council has also been encouraged to take a proactive approach, rather than acting on external pressure and put plans in place to ensure back up procedures can take the strain if payment systems fail.

While acknowledging the improvements made, OFT senior director of services, Cavendish Elithorn, said: "More work is needed to sharpen the Council's focus on the flexibility and efficiency of its systems and to make sure benefits are passed on to the end user."

Which? Economic policy manager, Pula Houghton, added: "It's been a year and a half since the original deadline to implement same day transfers so why are the banks dragging their heels? These shortcomings overshadow the overall good work that the Payment Council is doing."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

New Year tips to improve children’s money skills

How many have better budgeting as their New Year’s resolution? As with many things, these skills are best learned when young, so Lemonade Money has come up with some tips to help parents make their children more financially savvy.

Money worries lead to Christmas on credit

Money worries are putting Christmas at risk for up to five million Brits, with 10% saying they regularly worry about money in the lead up to Christmas, and the same proportion feeling stressed about how much they are spending.

Would you spend more for a character property?

We all have our own ideas of what makes a dream home, and for many, character features are at the top of the list. But how much more would you be willing to pay for those kinds of additions – and could they even help you save money in the future?