Faster banking payment system goes live

By Jennifer Hill

LONDON (Reuters) - A new service that will speed up the processing of banking payments went live on Tuesday.

The new "faster payments service" will benefit customers by speeding up one-off payments made over the Internet or by phone, reducing the current three-day clearing timescale to a matter of hours.

For the very first time it will also be possible to make such payments all day every day, and the service will enable same day clearing for regular standing order payments made on bank working days, again reducing the current three-day clearing period.

Over the past week, high street banks have been testing the system by sending and receiving payments in pennies, APACS, the UK payments association, said.

Paul Smee, chief executive of APACS, said: "The final part of this enormously complex project has been to test the new system in a live environment.

"Hundreds of penny payments have successfully been made between the participating banks."

The new service will rolled out gradually, with banks informing customers when it is available to them.

Consumer group Which? said the end of the "payment transfer black hole" was long overdue.