The UK's faster payments service, designed to provide customers with near real-time transfer of phone, Internet and standing order payment instructions - has finally gone live.
The multi-million pound system, developed by VocaLink and backed by 13 clearing bank members, went live just after midnight on Tuesday - some six months later than originally scheduled. UK payments association Apacs says by 7 am this morning, 898 payments had been made to a value of £461,383.43.
Participating banks have been testing the VocaLink Real-Time Payments Platform over the last week by making hundreds of penny payments.
However not all the founding banks are providing the service to customers at launch. Customers of Barclays, Citi, Clydesdale and Yorkshire Banks, HSBC, Lloyds TSB, Northern Bank and RBS are able to use the system to send and receive payments. But customers of Alliance and Leicester, HBOS, Nationwide, and Northern Rock will only be able to receive payments to begin with.
The Co-operative Bank is not set to offer the service for another six weeks, while Abbey will also be late in offering the service.
As part of the phased rollout, some banks are placing lower initial limits on the value of payments that can be sent or may be choosing to phase rollout across their customer accounts. Standing orders are not scheduled to start being processed through the faster payments service until 6 June.
The new infrastructure will eventually process Internet and phone payments of up to £10,000 and standing orders of up to £100,000.
However volumes on launch day are being "carefully managed", says Apacs, which means only five per cent of members' Internet and phone payments are set to be processed as faster payments today. Apacs says over the summer the overall volumes are expected to increase to over 50% of peak-day processing volumes.
Says Paul Smee, chief executive, Apacs: "Although the initial rollout will be gradual, and some customers may not be using the new service immediately, we expect that in the coming months this will ramp up to enable large numbers of customers to benefit from it."
Apacs says there were 27.5 million Internet or telephone banking users in 2007 and this is expected to rise to 40.9 million by 2017. Last year there were 124.5 million Internet and phone payments and 347.3 million standing order payments. In ten years these numbers are forecast to rise to over 300 million and 422.3 million respectively.
To mark the launch of the system, all 13 founding members joined together to make a charity donation of £10,000 to Oxfam for the Disasters Emergency Committee's (DEC) Burma Cyclone Appeal. Apacs says this was one of the very first payments in the early hours of this morning and it arrived at the charity within a couple of hours rather than taking three working days as it would have done in the past.
The platform was developed in response to calls from the UK's Office of Fair Trading (OFT) for an alternative to the existing Bacs and Chaps clearing systems.
Martin Wilson, chief commercial officer at VocaLink, says the platform is "one of the most revolutionary infrastructures the payments industry has seen in recent decades and has the potential to transform consumer banking behaviour and business practice across the globe".
Vocalink says the launch of the Faster Payments scheme is generating interest in its real-time platform from major banks around the world.