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Quicker payment times on the way

Quicker payment times on the way

Category: Money

Updated: 14/12/2012
First Published: 29/12/2011

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 It is now over 6 months old so the content may be out of date.

Quicker internet and phone banking payments are set to become standard from the beginning of next year.

The changes are part of a new Europe-wide initiative that will enable consumers to pay their tax and credit card bills on a same-day basis for the first time.

The new maximum timescale for electronic payments - technically known as D+1 - requires payments across the EU to reach the recipient's account by the next working day.

However, all standing orders and one-off internet and phone banking payments in the UK will exceed this requirement, being processed end-to-end within two hours through the Faster Payments service.

The change is expected to bolster the number of Faster Payments by 25% next year, creating an additional 15 million internet, phone and standing order payments per month.

So far in 2011, over £200 billion has been processed in more than 500 million Faster Payments transactions.

"This is great news for consumers and businesses," said Adrian Kamellard, chief executive of the Payments Council.

"More bills are going to be paid more quickly through Faster Payments and the change will mean more certainty if you have been sent money too.

"Not all payments we make will fall under this regulation and it is important to understand which will and which won't.

"If you want to know more about how the changes will affect you, or just need advice on how to get started with internet banking, payyourway.org.uk has advice and guides on every aspect of payments."

To be covered by the new faster timescale requirement, accounts have to be classified as 'payment accounts'.

All credit card accounts meet this definition and so will benefit from the quicker payments; some easy access savings accounts also meet the definition and so will benefit from Faster Payments for the first time.

There are, however, other types of accounts with restrictive features such as notice periods for withdrawals or limits on placing/ withdrawing funds (e.g. ISA accounts), that remain classed as non-payment accounts.

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