- New central system on track to be in place from November 2007

- Thirteen financial institutions* confirmed to be founding members

To coincide with today’s (Monday 12 February 2007) publication of the OFT’s final Payment Systems Task Force Report, the UK banking industry today confirms that they are on track to introduce the new faster payments system, agreed with the Task Force, by November 2007. They also announced that there are thirteen founding members* of the new system.

This system will put the UK up with the frontrunners of similar systems around the world. UK customers choosing to make a faster online or phone payment will be making it in near real-time - which means the payment will complete end-to-end within a couple of hours. It will also enable standing order payments** to move more quickly.

There are thirteen founding members*;however, other financial institutions will be able to join or access the system for their customers through agency arrangements with a founding member. Although the central system will be ready in November 2007 it will be up to each bank or building society to decide how and when it delivers a full service to all its personal and corporate customers.

Paul Smee, Chief Executive of APACS said:
“Building a new payments system of this scale is a mammoth task: this is a multi-million pound project to deliver a state-of-the-art system that will speed up phone, online and standing order payments. Central testing of the new infrastructure has already started and although in its early stages, is going well. In saying that, meeting our November target is still enormously challenging because all thirteen members have to link to the system and carry out further tests to ensure the new system will be safe, efficient and robust.

“This service will be great for any customer wanting to move money quickly - perhaps to pay a bill or move money between accounts. Like the internet, it will be available all day, and will move a payment within a few hours and on any day of the week.”

Further updates will be provided and clear information made available to customers about the impact this will have on them.

ENDS

For further information contact the APACS Information Office:

T: 0870 420 3208 E: apacs@fourcommunications.com

· The thirteen founding members are Abbey, Alliance & Leicester, Barclays, Citibank, Co-operative Bank, Danske Bank, HBOS, HSBC, Lloyds TSB, National Australia Group, Nationwide Building Society, Northern Rock, Royal Bank of Scotland Group. They account for over 95% of all payments made in the UK.

· ** The new system will also provide a same day service for standing order payments, (which currently takes three days) but these will still only be made on and within banking business days. This will address the concerns raised by the OFT by eliminating 'float' from standing orders (the interest accruing to banks when the money has left the payee's account but hasn't yet reached the recipient's);and will resolve timing issues relating to availability of funds for customers (that is, the payer will no longer need to have money in his or her account two working days before funds are paid to the beneficiary.

· Currently internet, phone and standing order payments account for just 7% of automated payment volumes, but these are growing rapidly as customers increasingly turn to them instead of more traditional payment methods such as cheques. The new system is being constructed to cater for the large volume increases projected for the future. The remaining 93% of automated payments are 'bulk' transactions generated by organisations and businesses both large and small and are: direct debits, used mainly to pay utility bills, life and general insurance premiums and various subscriptions; direct credits, used mainly for salary payments, pensions, annuities and child benefit.

· Internet and phone payments (if they are made from one bank to another) currently enter the automated clearing (often referred to as BACS). After the payer’s bank receives an instruction by telephone or internet banking it will submit the instruction to the clearing on the first working day (Day 1) - when the payer’s account is debited. The payment is processed and reaches the destination bank on Day 2, which updates its accounts and makes funds available on the destination customer's account from the start of Day 3.

· LINK and Voca are the suppliers who are working to jointly develop and provide the new payment system. LINK is the UK’s cash machine network provider and Voca currently provides the infrastructure for the 5 billion automated debits and credits we make every year. They have set up a joint venture company, IPL (Immediate Payments Ltd) to provide the infrastructure for the faster payments service.

· APACS is the trade body that gives banks, building societies and card issuers a forum where they can work together on non-competitive issues. In a nutshell we help manage the way that businesses and individuals in the UK move their money around - this covers cash, credit and debit cards, cheques and automated payments such as direct debits, salary payments and online/phone transactions. We also champion the fight against banking fraud and are the people who have been working to give consumers greater card fraud protection by introducing chip and PIN. Twice a year we publish figures on banking fraud losses.