UK banks tender for new e-payments system
22 November 2005 | 6850 views | 0
The UK's banks are on the verge of selecting a new clearing system that will cut the time it takes to transfer electronic payments between accounts.
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 electronic payments - which includes transactions made via the Internet or by telephone and standing orders.
The new system is expected to cut clearing times for e-payments from three days to the same day.
According to a Financial Times report, a number of companies have tendered for the contract to provide the system - which is expected to cost up to £65m - including payments processor Voca, cash machine network Link, Visa and MasterCard.
The Association of Payment Clearing Services (Apacs) is due to announce the preferred IT platform to the OFT task force on 15 December.
Payment clearing times in the UK are longer than in almost any other G10 country, with some banks taking up to five days to process payments. A 2003 OFT report found that British consumers are losing £30 million annually in lost interest payments due to delays in clearing standing orders, Internet and telephone banking payments.
But the new system will not be introduced until the end of 2007 and will not cover cheque payments, which are being investigated by the payments task force separately.