Blog article
See all stories »

An article relating to this blog post on Finextra:

Faster Payments stalls among non-clearing banks

The UK's Faster Payments service has had a successful start among the founding clearing banks since its launch last May but adoption of the system by other financial institutions has been disappointin...


See article

Faster Payments?

The UK's Faster Payments service has taken a critical panning from the BBC. The Corporation's MoneyBox programme claims the system is in "disarray", as banks implement the technology in a disjointed patchwork fashion.

Northern Rock, Citibank and Abbey have not started to make same-day payments.

The Association for Payments and Clearing Services (APACS) which represents the industry has removed Abbey's name from its published list of Faster Payments subscribers.

The bank told Money Box it has had to "reschedule its implementation" while it focuses on IT integration with its parent bank, Santander.

Other founding members have started making Faster Payments, but have made little progress.

Nationwide building society, Co-operative bank and Yorkshire and Clydesdale banks are processing less than 10% of transactions in this way.

Only one in three sort codes of Nationwide's FlexAccounts can receive same-day payments.

MoneyBox claims to have been inundated with complaints from customers who say the system is often unreliable and that they do not know when money will clear. I made my own position on this clear when I blogged about my experiences with Internet bank Egg back in September last year.

The UK banking industry used to be pretty good at co-ordinated mass-market switchovers to new technology. It has taken a massive step backwards with regards to Faster Payments.

Comments: (1)

John Cant
John Cant - MPI Europe Ltd - London 26 January, 2009, 13:31Be the first to give this comment the thumbs up 0 likes

This is interesting additional information on this topic and is in line with the patchwork implementation we have reported that is blunting the benefits of what is an innovative scheme. For example, in our recent researchMPI Europe have heard from a substantial group of what could be called “early adopters” who have been frustrated when trying to use Faster Payments (FP) in slightly different, or innovative, ways to do things like maximise their interest by using same day payments. Also due to fraud worries some are not able to initiate an FP payment through their internet banking application.

Consistent with the MoneyBox findings, one of the key trends they tell us is that they don’t know till they make the payment whether it can be an FP payment or not, due to restrictions on amounts, sort codes or channels. Without having a clear understanding of who is doing what and when we see consumers shying away from making full use of FP to make their payments later mainly because of the cross industry ambiguity and uncertainty. To address this, the banks need to solve the issues that are preventing them offering FP as a universal service including rolling it out across all channels, offering agency bank and corporate access and implementing stronger anti-fraud functionality.

There is more work to be done on Faster Payments in 2009 and beyond.