In May, the Office of Fair Trading's (OFT) payment systems task force gave UK banks six months to agree on a technology platform to speed up processing of payments made via the Internet or by telephone, and for standing orders.

Payment clearing times in the UK are longer than in almost any other G10 country. On average it takes three days to process e-payments but some banks take up to five days.

The new system, which will be introduced in 2007, will cut clearing times to just hours, regardless of when the payment is made.

Paul Smee, chief executive of umbrella payments body Apacs, says: "The service will also be available all day, every day and means that customers will have the flexibility and convenience of moving money between accounts or paying bills on the same day within a few hours and on any day of the week."

Although Internet, phone and standing order payments currently account for just seven per cent of automated payment volumes, Apacs says the new system is being constructed to cater for the large volume increases projected for the future.

So far 11 institutions, accounting for over 95% of today's existing automated payments, are committed to the new service. Other institutions will be able to join or to access the system through agency arrangements with a founding member.

John Fingleton, OFT chief executive, welcomed the move. "This is really good news for both personal and business bank customers. The banking industry has met all the criteria set for it," he says. "The near real time service, available 24/7, to be introduced by the end of 2007, goes even further than the task force recommended."

A joint venture has been created by Voca and Link to build, deliver and manage the new infrastructure.

Marion King, CEO, Voca, says: "Our new, industry leading, technology infrastructure for payments processing, is complementary to Link's real-time payments processing services. Together we offer a robust, cost effective and low risk solution."