Banks agree to quicker transfers

The banks have six months to consider its technological platform

BBC Radio 4's Money Box was broadcast on Saturday, 28 May, 2005, at 1202 BST.

The programme was repeated on Sunday, 29 May at 2102 BST.

Read the programme transcript

The banks have agreed to reduce the time it takes to clear electronic payments made over the internet or by the telephone, the Payment Systems Task Force has said.

The Task Force was set up in 2004 to identify and resolve issues of competition, efficiency, and incentive relating to payment systems.

Currently it takes three to five days for an electronic payment to go through, which earns the banks £30 million a year in interest, according to Office of Fair Trading figures.

But the new service will not not be in place until November 2007.

The National Consumer Council welcomed the announcement but called for a tighter timetable and speedy action on cheque clearing times.

Embarrassment

Consumer group Which? said it was a "long delayed step forward" and warned that "people would not tolerate any more delays".

Certainly, the calls for change go back for years, and not just from consumer groups.

Chancellor Gordon Brown did so in 1998. And last June Bank of England Governor Mervyn King spoke of his embarrassment at the way UK banks clear money compared to the other top 10 richest countries.

Paul Lewis asked Jonathan May, Chairman of the Payment Systems Task Force, what we can expect following publication of its report setting out the banks' agreement.

And he asked Paul Smee, Chief Executive of Association of Payment Clearing Systems, why people must wait another two and a half years.

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Producer: Chris A'Court
Presenter: Paul Lewis
Reporter: Samantha Washington