UK Payments Council board backs account switching plan

UK Payments Council board backs account switching plan

The UK's Payments Council's board has given the go-ahead for a project to make bank account switching easier for consumers and small business, committing up to £850 million for the operation.

The Independent Commission on Banking (ICB) has set its sights on the often difficult process of account switching as part of its push for increased competition in the sector.

Initially the Commission looked at full account number portability but in its final report, published on Monday, settled for an emasculated "redirection service", deciding that it can deliver many of the same benefits at a lower cost.

The banks estimated that full account portability across the industry would command a hefty £5 billion investment in systems. In contrast, the service it has gone with is expected to cost between £650 million and £850 million and will launch in September 2013.

A service guarantee will be provided for customers moving their account and there will be a commitment that consumers and small businesses will be able to switch all aspects of their current account from one financial institution to another in seven working days.

In addition, a redirection service will be developed for customers' payments into and out of their accounts, including direct credits, debits, standing orders and regular card payments.

Gary Hocking, acting CEO, Payments Council, says: "From September 2013 switching a current account will be faster, easier and backed by a guarantee. Customers will be able to move their account, lock stock and barrel in seven working days."

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