30 September 2016

UK sets up new payments governance body

14 November 2006  |  6404 views  |  0 London Gherkin building

Cheque clearing times across UK bank accounts are to be standardised in the final ruling by the Office of Fair Trading's Payments Systems Task Force, which is to be wound up and replaced by an independent body.

The Payments Industry Association will be the new strategic governance body, and will concentrate on access, innovation and governance issues. It will include four independent non-banking directors, alongside eleven senior bank executives, as well as an independent chairman - Brian Pomeroy, a former senior partner at Deloitte Consulting. The independent directors will collectively have the power to veto proposals.

Jonathan May, OFT chairman of the Payment Systems Task Force, comments: "The creation of the Payments Industry Association is good news for both consumers and businesses. It will provide strategic direction to the development of payment systems in the UK and its strong governance arrangements will ensure that the needs of users are taken fully into account."

The news has been well received by consumer groups. Ashleye Gunn, head of Money research at Which? comments: "Which? welcomes the establishment of the PIA as a direct result of consumer concern. However, we will be watching this association closely to ensure it is meeting its objectives at all times."

The move to provide certainty in cheque clearing times for withdrawals and deposits has also been welcomed. Philip Cullum, deputy chief executive of the National Consumer Council (NCC) says: "Britain’s centuries-old cheque clearing system has for too long been slow and confusing. Today’s announcement is a positive step that will benefit many consumers – offering them greater certainty and better service."

The main proposed changes are: money deposited into any account will start to earn interest or will count against overdrafts no later than two working days after the cheque is deposited and all consumers and businesses will be able to withdraw funds deposited by cheque into current and basic bank accounts no later than four working days after the cheque is deposited.

Significantly, the Task Force concluded that there is no case for a complete rebuild of the cheque clearing system. Research shows that the number of cheques in circulation is falling by around eight per cent per year, and this rate of decline is likely to increase substantially when the new faster payments service for phone and Internet payments becomes available in November 2007. In addition, several major retail groups are either trialling not accepting cheques as a payment mechanism at their tills or have stopped taking cheques altogether.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Lloyds TSB to implement Faster Payments gateway with ACI

Lloyds TSB to implement Faster Payments gateway with ACI

02 November 2006  |  10847 views  |  0 comments
OFT to probe Internet shopping

OFT to probe Internet shopping

28 April 2006  |  5325 views  |  0 comments
Link to open up to consumers

Link to open up to consumers

06 April 2006  |  5022 views  |  0 comments
Bacs ordered to open up to businesses and consumers

Bacs ordered to open up to businesses and consumers

01 March 2006  |  10953 views  |  0 comments
UK watchdog to probe new MasterCard fees

UK watchdog to probe new MasterCard fees

02 February 2006  |  6957 views  |  0 comments
Visa threatens OFT with legal challenge

Visa threatens OFT with legal challenge

17 January 2006  |  7194 views  |  0 comments
Voca and Link win UK e-payments tender

Voca and Link win UK e-payments tender

16 December 2005  |  8756 views  |  0 comments
UK task force to investigate cheque clearing times

UK task force to investigate cheque clearing times

08 November 2005  |  6120 views  |  0 comments
OFT establishes payment systems task force

OFT establishes payment systems task force

17 March 2004  |  10071 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
Visit contisgroup.comVisit www.abe-eba.euFind out more

Top topics

Most viewed Most shared
Ripple rudely gatecrashes Sibos partyRipple rudely gatecrashes Sibos party
11052 views comments | 35 tweets | 33 linkedin
BNP Paribas is working with clients on blockchain deploymentBNP Paribas is working with clients on blo...
7937 views comments | 15 tweets | 31 linkedin
Banks ready for real-world blockchainBanks ready for real-world blockchain
7014 views comments | 22 tweets | 29 linkedin
PayPal and Lenovo team on biometric authentication for laptopsPayPal and Lenovo team on biometric authen...
6812 views comments | 13 tweets | 16 linkedin
Distributed ledger technology could damage financial market integration - ECBDistributed ledger technology could damage...
6275 views comments | 15 tweets | 10 linkedin

Featured job

Find your next job