- Faster payments service launch to be delayed beyond November

 - Changes to cheque clearing processes still on track for this 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 UK’s 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.

Today’s announcement will not impact the UK banking industry’s 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 payer’s account.

ENDS

For further information contact the APACS Press Office:

T: 020 7711 6234 / 020 7711 6340 E: press@apacs.org.uk

• 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.

• The thirteen founding members of the Faster Payments Service are Abbey, Alliance & Leicester, Barclays, Citibank, Co-operative Bank, Northern 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.

• VocaLink is the supplier working to develop and provide the new payment system. VocaLink has set up a joint venture company, IPL (Immediate Payments Ltd) to provide the infrastructure for the faster payments service.

• The Cheque and Credit Clearing Company is responsible for the bulk clearing of cheques and paper credits throughout Great Britain. Cheque and credit payments in Northern Ireland are processed locally.  Members of the Cheque and Clearing Company are individually responsible for processing cheques drawn by or credited to the accounts of their customers. In addition, several hundred other institutions provide cheque facilities for their customers and obtain indirect access to the cheque clearing mechanisms by means of commercially negotiated agency arrangements with one of the full Members.   The Cheque and Clearing Company Limited is an autonomous company but outsources its staffing and resource requirements to APACS (Administration) Limited.