OFT report reveals weaknesses of Faster Payments service

| March 26, 2009 | 0 Comments
OFT report reveals weaknesses of Faster Payments service

A report from the Office of Fair Trading (OFT) has revealed that the new Faster Payments service is not as efficient as it could be.

The Faster Payments service was launched to speed up the time taken for electronic bank payments to clear but the report revealed that the service is only running at 69% capacity. It is expected that the system will reach full capacity in the early summer.

Pula Houghton, economic policy manager at consumer group Which?, describes banks as “dragging their heels” and said customers are still not benefiting from the service.

As a result, consumers have lost between £38 million and £82 million since the service was introduced.

Sandra Quinn, of payments association Apacs, told the BBC that “the system was only ever meant to be brought in gradually, to ensure it worked properly“.

More than a dozen banks have signed up to the system whereby customers can make one-off payments which will arrive at the destination account on the same day. Many payments are cleared within minutes.

The OFT report suggests that the Payments Council, the group appointed to oversee the way consumers pay for things, should improve the take-up of the scheme.

The thirteen institutions currently signed up to the scheme are Abbey, Alliance and Leicester, Barclays, Citi, Co-operative Bank, Clydesdale and Yorkshire Banks, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Northern Bank, Northern Rock and Royal Bank of Scotland.

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