Page last updated at 16:00 GMT, Tuesday, 27 May 2008 17:00 UK

Faster transfers: your questions answered

Computer user
The new system started on 27 May

A new scheme that speeds up cash transfers made by telephone or internet banking started on 27 May.

After years of frustration, customers can make one-off payments up to a maximum value of 10,000 over the telephone or via the internet, which will leave their account and arrive at the destination account on the same day.

But not every bank has signed up to the Faster Payments Service and not every payment will be quicker from day one.

The BBC News website received a series of comments and questions in response to our articles about the new scheme.

Here, Sandra Quinn, of the UK payments association Apacs, answers some of the questions and concerns raised by readers.

"It's a system that is long overdue, and has been in operation elsewhere in Europe for a number of years." (Steve, Wealdstone) Why were we behind them?

Different countries have very different banking systems.

Some countries have managed to introduce similar systems before us but this is generally because they have fewer banks and fewer customers, so their payment systems are far less complex, and it has therefore been much easier for them to bring about change than it has here in the UK.

In addition, internet banking has only recently taken off in the UK. As recently as 2000 there were only 3.4 million customers using online banking but by last year this had risen to 21 million and so the business case for developing a new service has only improved in the last two to three years.

"I bank with Intelligent Finance, a subsidiary of HBOS, and apparently I am unable to make faster payments - despite HBOS being a founder member. Somewhat disappointing, and very misleading." (Dan McCullam, Salisbury)

The industry is rolling out this new service gradually and inevitably some customers are going to be disappointed that they will have to wait for a little while before they can make use of the new system.

My primary concern would be how safe is this going to be?
Julian Evans, Peterborough

However, if you are in this position you won't have to wait long, as within three months we expect the vast majority of all phone and internet payments to be sent through the new service and, in the meantime, it shouldn't be confusing because your payments will continue to be processed as they always have been - through the three-day system.

With all the money and time the industry has invested in this new service it is in everyone's interests that the Faster Payments Service is used for all of the UK's phone, internet and standing order payments as quickly as is prudently possible.

The phased rollout is being adopted because a big bang approach would have been more risky. It was not meant to mislead customers but to ensure a smooth rollout.

"I use internet banking and am delighted to know transfers will be quicker between banks. But I have just checked my Co-operative, Smile and Nationwide accounts online and NONE of them have any mention of it." (S. Coles, Nottingham)

Individual banks are responsible for managing their own communications to their customers and it is fair to say that most are ramping that up gradually. Information is available on some of their websites.

Your own bank or building society should always be your first port of call if you want to know if, and if not, when, you can send payments through the new service.

At industry level we will update our own website - - to reflect the different banks coming on stream with different services and we also have a checker, which allows you to input a sort code if you want to check whether that sort code is able to receive a faster payment -

"My primary concern would be how safe is this going to be? Firstly the three to four day clearing rule allows users to identify and then stop potential fraudulent transactions. This new system will not allow this. I'm sure this will lead to yet higher levels of online fraud. I suspect the banks will then be offering account insurance. Is the new system the right time to open up this new revenue stream for the banks?" (Julian Evans, Peterborough)

Customers already have a guarantee under the Banking Code which protects them if they are the victim of online banking fraud with the onus to prove any negligence lying with the bank, so innocent customers should not lose out financially.

Security plays an integral part in every payment and this new system has layers of protection built into the central infrastructure and by the banks at both the sending and receiving ends of the payment to minimise any chance of financial loss.

This new service is about enabling customers to make payments promptly but also securely.

"Typically the Bank of Ireland is lagging behind in the dark ages with regard to provision of technological solutions for users. Such a shame, their in-branch customer service is second to none. Come on Bank of Ireland, catch up with the game!" (Damian, Derry, N. Ireland)

There are 13 initial banks who are members of the Faster Payments Service but we do expect other banks to come on stream.

Some banks and building societies will become members in their own right and others will decide to access the new service through one of those 13 banks.

Offering faster payments to customers is a competitive decision.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

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