Only last week, the consumer group Which? branded the UK’s Faster Payments scheme as unfair and confusing (BBC News, 11 June 2010). Apparently, ‘one in four credit card companies still cannot
receive faster payments’ and the different transaction limits between banks appear confusing. I can’t help but think that this is a little bit unrealistic - the fact remains that Faster Payments is an
optional scheme, so achieving 100 per cent take-up in only two years seems extremely ambitious. If, for instance, the industry had increased the speed of a universal scheme like Bacs then we would be looking at an entirely different scenario, achieving
100 per cent coverage on the day it went live at the cost of not being truly immediate.
The main problem here is around the education of customers – frequently, banks do not provide information before a transaction is made on whether the payee can receive a Faster Payment and rely on them to check on the website of UK Payments Administration
or the Payments Council. Furthermore, some banks including Alliance & Leicester impose lower,
transaction value limits than others which can result in the exclusion of regular payments such as credit card bills which typically top £1000 per month. While the Payments Council
claims that over 95 per cent of accounts can accept Faster Payments, consumers still need more clarity before they make a payment on when it will arrive in order to effectively manage their finances. Unfortunately, at this stage, we are still some way off
establishing common practice around providing information before making Faster Payments.
Even if the banks were able to get all their ducks in a row, there is one final issue that isn’t highlighted in this article. This involves situations where money is received by the destination company but not applied immediately to the consumer’s account.
A customer of a utility provider, for example, may make a Faster Payment from their remote banking service and have confirmation that it has been received however the utility company’s processes may not credit the customer’s account immediately and in some
cases days after. This happens particularly when the payment reference information – typically the customer’s account number, is damaged, incorrectly formatted or invalid. However, in many cases it is purely because the process to apply the transaction hasn't
changed from when the payment was on a three-day cycle. In this case, an extra layer of unpredictability is added to what should be a simple bill payment.
Until these business processes are updated and banks provide more information to consumers prior to a transaction, consumers will still be waiting to fully benefit from one of the most innovative payment developments in the last thirty years.