British consumers are losing £30 million annually in lost interest payments due to delays in clearing standing orders, Internet and telephone banking payments, says the Office of Fair Trading.
The figures were released by the UK competition watchdog following a three-month investigation into the UK payment system.
In its report, the OFT says some progress has been made on competition issues "but important questions remain requiring further action".
While the banking industry has agreed proposals to shorten clearing cycles and separate the ownership of clearing schemes from their technical infrastructure in BACS, it has yet to set a firm implementation date for these developments.
While urging the banks to meet their commitments to speeding up payment transfers, the competition body welcomed industry proposals to be more open with consumers about the length of clearing cycles. The OFT says it will work with the industry to draw up agreed levels of transparency.
The Consumers' Association complains that the OFT has been too soft on the banking industry.
"The £30m nice little earner for the industry will rapidly become a nice big earner as electronic payments grow," says the Association in a response to the OFT report. "It is naive to expect the banks to introduce next-day clearing all by themselves. The banks have not yet made a firm commitment to do this or set out a timetable. What possible incentive is there for them to stop skimming money from consumers while they can earn interest from the current, slow system?"
The OFT needs to take a tougher line, says the Association, and demand a fixed deadline after which it will take action against the banks.
Banks have queried the OFT's £30 million estimates - which assume five per cent interest and a two-day delay in clearing cycles - by pointing out that few current accounts pay interest at the levels stipulated.
On other payments-related issues, the OFT says it will shortly conclude the Competition Act investigation into Mastercard interfchange fees and determine whether action is required on access to merchant acquiring and on debit card networks.
John Vickers, OFT Chairman, says: "The report shows that some progress is in train, but big questions remain. The OFT's wider work on competition and consumer issues in banking services continues."