Ready, set, go! How quickly will your payment get to its destination?
Thirteen banks and building societies signed up to a new faster payments system in May 2008, but Money Box has learned that eight months after it was launched the system is in disarray.
While not all of the 13 institutions were offering to make same day payments out, and not all of them were going to be ready from day one, all pledged commitments to be in this position by the end of the year.
But following e-mails from our listeners we have found out that some of the banks have not kept their word.
Has your bank speeded up its payments system?
Do you think all banks should offer same day transfers?
Would you be happy to pay extra for the service?
Why not share your thoughts?
We asked for your comments, a selection of which are below. The debate is now closed.
MOST RECENT COMMENTS:
What is the benefit to the banks of speeding up the process? None. What is the cost to the banks of not speeding up the process? None. Is there a cost to the banks to implement the change? Yes. Has a pig just flown by?
I work for a major bank, and the issue which no one seems to mention is the fraud risks associated with faster payments. The current three days system gives us time to identify fraudulent payments and stop them, the faster payments service represents a major issue for stopping fraud. Customers don't seem to care as they know the banks will refund their money, but this loses millions for the bank
I'm Brazilian and in Brazil there is not a chance a payment made in a certain date will not meet its target on the same day. And regarding to money transfer between individuals, as soon as a transfer is made you can see it on the recipient's account (under certain situations it will take a day to clear but you will see the amount to be cleared in a special status). We, as customers, should make ourselves to be heard and force banks to respect our needs and stop stalling to do so to keep making inappropriate profits.
Daniel Alheiros, London
In this age of technology where purchases via debit/credit cards is instant, why must we still endure the antiquated and ridiculous rule of four working days for cheques to clear in our accounts? It is so obviously a money making scheme at the expense of the consumer and it's time it stopped! Funds should clear no later than 24 hrs after being paid in, especially when they are from corporate origins.
Pamela Mitchell, Edinburgh
For the first time ever I feel compelled to defend my bank - HSBC - they have processed all my transfers to Barclays and RBS within half an hour. All these transfers were all within the £10,000 limit though.
A Marsh, London
Must applaud Nat West - their online transfer system is almost instant. You have to set up a new payee by using their card reader which completely avoids the risk of entering wrong information. Then the transfer showed up in my Coventry Building Society account within an hour on three occasions. Well done.
I personally bank with the Halifax and my small business with NatWest. Transferring funds between them happens almost immediately. Paying bills to other banks is a bit hit and miss. However, without exception, paying utility bills and the government (taxes and NI) always takes several days. Seems like the usual government policy of do what I say and not do what I do.
K Davies, Tamworth
The Faster Payments process is totally unpredictable. I made a formal complaint to HBOS but they never made any attempt to justify the variability or the £500 limit that nobody is told about. The banks treat us like idiots but in the new world order they are owned by us taxpayers so had better start treating us like valued clients and not sheep to be fleeced.
Mr Olivula, Brighton
I have been extremely impressed with the faster payments system for RBS. The funds seem to arrive within minutes to my other accounts (even though RBS advertise up to two hours for this to happen), I've even transferred funds on a weekend and they're arrived within minutes. It's a shame Birmingham Midshires (part of HBOS) don't seem to have the same idea, I have a savings account with them where, for reasons unknown, your interest cannot be credited to that account and has to be transferred to an account elsewhere - this seems to take approx six days. It's ludicrous. It's a similar story with taking money out, that takes around three days to arrive elsewhere
In 1908 it took 4 days to clear a cheque. In 2008 it takes 5 days (Lloyds TSB) why are we so patient? Come the revolution.
Evan Douce, Southwold
This system does not work and has not been implemented. At first a few transactions between my Lloyds and Barclays accounts went through the faster payments service however a few months ago payments went back to the slow three day system. How APACS can say things are working well I don't know. Fed up with supporting these banks and their associations.
Faster payments are not always a good thing, because there's an instance when they are not faster. I've had a standing order in place for 11 years that goes from an RBS account to a Halifax account. I was sent an overdraft charge letter from the Halifax because the RBS payment was sent this year by Faster Payments, and it arrived two hours after Halifax processed my outgoing BACS standing orders. My statement showed a healthy balance for the day in question, but Halifax wanted to charge me for the two hour delay. Every previous year it seems it was sent via BACS. I was not informed by RBS of any change in their payment method so had no prior chance to move my transfer date forward. Thankfully Halifax eventually waived the charge after a second phone call. So it appears BACS can still be faster than Faster Payments for standing orders! However, I can say I have seen same day and next day one off payments since the new system came in so on the whole it is a good thing. I just wish my banks would tell me when they "improve" my things!
Normally I, like many others, would be knocking the banks, but I have to put forward a good word for NatWest who clear payments in as well as bills out quickly - even when I pay in a cheque, it's in my account in two days.
Keith Davies, Caernarfon
My accounts are with NatWest and all my payments arrived almost instantly. I've sent payments to other NatWest account holders, as well as those with HSBC and Barclays. No problems at all so far. Having read the comments from other readers here, I must count myself lucky!
Having worked in banking for 10 years I was at first consistently amazed and then annoyed at the continuing slowness of the UK payments system. Bank-to-bank payment transfers are made with a value date i.e. I might instruct a payment today (Sunday 25 Jan 2009) to be credited to another bank dated Monday 26 Jan 2009. The date selected could be for a future or past date (very rare but is sometimes done) but it will be credited to the other account with the payment date specified - otherwise the other bank will be coming back to the payor demanding interest for the days that it was missing from their account. On the continent interbank transfers for normal customers has been quicker for many years and it takes 1 or 2 days at most for almost all forms of payments. There is no reason why the government/regulators could not insist that the technology is adopted by all UK financial institutions to give customers this better level of service. The only reason not to provide it is to continue allowing banks however many days they want to use our money to earn interest for themselves by placing it on the overnight lending markets - at least this part of the wholesale lending markets is still working for the banks! APACS, UK Treasury, FSA shame on you all! Pull your fingers out and get this sorted ASAP, I'm fed up of seeing my money disappear into a black hole and more importantly in these days of straightened cash flows these delays might be putting companies out of business.
Finance insider, London
The banks here in Holland really put the British ones to shame. I live here in Holland and also have my own business. I regularly make transfers using internet banking and the funds are transferred almost instantly from my account to my suppliers accounts. If it is possible here then why can't the British bank get their act together?
Mark Holmwood, Barneveld
"It is estimated that banks made £30m a year in interest from taking up to four working days to move our money." Well, that would explain everything. Cynical? Probably not.
I transfer money from my Japanese account to my Lloyds TSB account in the UK. This transfer is almost instant as soon as the banks open in Japan, despite the money having to pass through three different banks before reaching the UK. But when I try to re-distribute my cash, say from Lloyds TSB to Nationwide or NatWest within the UK, it takes up to four days! This just doesn't make sense. It would be faster to fly home, take out the cash and put it in the other bank.
The banks practice an art of delay, which allows them to "overnight" their holding balance to another institution at a % rate. The longer they can delay payment the more profit they can make from our money. The last thing they want is a faster payments service.
Brian Faulkner, Bridgwater
Earlier this month I made two payments of £500 each from my Barclays account to a NatWest account in the Channel Islands. These payments were needed to pay for emergency medical services. The first instruction was given late on a Sunday and arrived without any trouble the next day. The second instruction was sent after noon on a Monday and was also paid on the same day! Both amounts were immediately available for cash drawings on the day of transfer. It cannot get better than that.
W Morgan, Epsom
Online I set up a bill payment to my credit card account to clear the whole balance. I set this to go on the same day that the minimum payment was taken by direct debit. The direct debit went though in one day the bill payment took four days to get to my credit card account, so now I been charged interest for last month and this month. Unbelievable.
Morgwn Davies, Haddington
I bank with Lloyds TSB and I have found it extremely difficult to send payments by the Faster Payments System. A few months ago they withdrew this facility from online banking. They claim to still offer it for telephone banking, but in practice my attempts to make a faster payment are usually refused because of alleged security concerns, even when I am sending money to an account I hold with another bank or to someone to whom I have made previous payments. On the most recent occasion, my request to transfer £1,000 as a faster payment was refused but a payment of £500 was allowed. I was told that even this smaller amount is not guaranteed, as Lloyds can change their faster payments limit on a daily basis. To put this in context, the APACS system limit for faster payments is £10,000. I also have an account with NatWest and my experiences with them have been excellent with no difficulty making faster payments online or by telephone, including some for considerably more than £1,000.
Simon N, Stockbridge
For me the main issue is not the speed of transfer, but reliability. When an incoming payment appears in my account, I should be able to use those funds immediately with no risk of the bank taking them back again. This is not yet the case.
Chris Grey, Guildford
The FSA should be getting to grips with this issue rapidly as I feel that a number of institutions are breaking their Faster Payment commitments. It staggers me that Abbey still have made no progress and that HBOS still have petty restrictions in respect of which accounts can be used to send Faster Payments. The promised advantages still cannot be relied on well over six months after the then delayed start of the service.
Chris Rowe, Truro
For some time now almost all my internet banking transfers within the Netherlands have arrived on the same or following day - even between Postbank and Rabo (Postbank always used to take longer). If Holland can do it, why not the UK?
H Lake, Bussum, Netherlands
I am working on contract to the IT section of Co-operative Financial Services who run the computer systems of the Co-operative Bank. In order to ensure a smooth transition, a multi-phased approach has been taken to Faster Payments. A staged introduction for inbound payments is now being followed by the opening up of sort codes for outbound payments. This cautious approach is, in my humble opinion, better than simply opening the floodgates because it is difficult to predict the precise volume of message traffic that will be generated. Also, there a penalties for not turning the payments around within the agreed time limits. This is the biggest change in UK banking systems for many, many years, and is right to ensure that customers are not negatively impacted.
Phil Downes, Charmouth, Dorset
I would take issue with Barclays statement that they had 100% success. I recently complained to my "Personal Banker" that a payment made through Barclays internet banking had taken 3-4 days and was told that most payments above a certain level (I believe £10,000) still went by the old system and of course it was not possible to tell which system would be used.
Roger Hogben, Newport, Shropshire
I consider Lloyds TSB is disgracefully disregarding any rules applying to the Rapid Transfer system. Twice, in the past six months, it has failed to transfer funds to my Tesco account in time to avoid incurring late and/or interest penalties, though I have carefully arranged dates and working days so that this should not happen. This week I have been further annoyed by having to make three separate transfers to a building society account because the bank imposes a £10,000 per day limit (Why? It has never warned me that there was this restriction.) but adds insult to injury by postponing my request to transfer until the following day - it doesn't tell me it is so doing, of course - so that it has taken me all week to achieve one transfer which, if the system was working properly, should have been achieved on Monday with one transaction. I have banked with Lloyds for 63 years but am querying my loyalty to them.
D Miles, Havant, Hampshire
Money leaving my account to be paid to big companies or to banks... instant or within a few hours! Money transferred from companies or banks into my account for my use... days! Strange that!
It is stupid that Abbey, being a so-called founder member of the scheme. has pulled out of the Faster Payment System altogether. I remember in the 90s, Abbey National used to take three days to make an internal payment to a Personal Pension Account held at the same bank - not a very efficient way of conducting business!
Kai Chung, London
I am confused - the Halifax has told me that faster payments can only be used for sums up to £500. Is this a ceiling which Halifax has invented, or is it the case for all banks? What is the max sum anyone has transferred using the faster payment service? In my experience, faster payments are very hit and miss. I can make faster payments to Skipton BS and Barclays, but not to Nationwide BS despite them being one of signatories.
A rare compliment! I bank with both Halifax and Bank of Scotland. They introduced "faster payments" (i.e. almost instant) during 2008 for up to £10,000. Of course, if you want to move more than the limit, you just make two or more payments. It works extremely well and I'm very impressed with this service and their internet banking system in general. I also have internet accounts with other banks but find HBOS by far the best.
I'm very impressed with this service
I bank with BOS and have seen little sign of improvement in interbank/institution transfers. In fact, if anything, things have gotten worse for me in that online banking transfers will now only be accepted for the next business day and that is a step backward from what I have been used too.
Sandy Middlemas, London
Every month I transfer payments from the Rabo bank here in Holland to Lloyds TSB. It shows as being taken instantly from my Rabo account but takes anywhere from one to five days to appear on my Lloyds statement. As with the "Pensioner", my transfers are dependant on time factors and I have standing orders which need to be taken from Lloyds. Despite many expensive phone calls to Lloyds the transfers often take too long and I either default on a standing order or am shown as exceeding my credit limit incurring heavy costs. This pot luck system needs to be addressed so that we are assured that our money isn't sitting in limbo for up to five days.
S Clarke, Alphen Aan Den Rijn, Netherlands
Cleared my mortgage at the end of 2008 via the Faster Payments system. My bank is Alliance & Leicester and the building society bankers are Barclays. The building society claimed that the redemption came late (i.e. the standard five days). I asked them to provide details of why there was a five day process at their end so that I could complain to APACS. They then told me that there was no late payment and that I was not to be charged interest for the overdue amount. Result!
HBOS (Halifax) only ever implement faster payments service on trivial amounts. Any significant sum (apparently around £500) does not ever go through faster payments but is actually delayed (always!) until the next working day so takes a week. I will be making a formal complaint to them.
G Orwell, Sheffield
I have had many complaints regarding Lloyds TSB and their variable and always slow transfers. Internal transfers from a savings to a current account can take up to 48 hours, e.g. I made a transfer on Thursday at 1900 approx which was still unavailable on the following Monday. Lloyds have made several payments in compensation to my account but at £25.00 per time, the inconvenience usually cost me more. HSBC seem to work in real time.
D Grimmond, Markington, Harrogate
I have just surrendered an insurance policy to pay off part of my mortgage. One week later the payment was still not showing on my Woolwich mortgage account. When I chased this up at the Woolwich they told me that the payment had been received but was in the wrong account. They told me that it would take three days to transfer it correctly to my own account. It has now appeared in the right place but why does it take three days to transfer money from one account to another within the same bank?
Peter, Alcester Warwickshire
I pay wages from a Barclays account to NatWest and First Direct accounts and it is not reliable. Sometimes it goes through the same day and other times it takes days. This isn't satisfactory for our employees.
I bank with First Direct (HSBC online) who implemented fast payment immediately. However when I pay bills online for my credit cards, etc. First Direct warns you that the recipients may not have implemented the new system as NatWest Visa told me when I phoned them. When requesting a payment First Direct gives a choice of date to leave account or arrive and this used to allow for the four day lag. Now you have to calculate it yourself. It is chaos out there. You would have thought that given the notice given for the change, everyone would have come into line at the same time. The cock-up theory of management seems to go from the top to bottom of our financial systems.
Richard Akers, Loughborough
Your listeners should be made aware that from 1 November 2009, banks will be under a legal obligation to transfer funds by, at the latest, the following business day, although there is an exemption up to 1 January 2012 for up to three days, if agreed. This comes from the Payment Services Directive. This Directive has significant consumer protection measures which do not, as yet seem to have been recognised outside the Regulators (which will largely be the FSA, and the banks).
John Burns, Redhill
Lloyds TSB withdrew their on line Faster Payment system within about two months of its introduction in June 2008 claiming technical difficulties as the reason. They promised it would be working again by the end of 2008 but it isn't. Since then they have offered a Faster Payment scheme by telephone service which in my experience rarely works within the same day and invariably takes three to four days to reach the recipient bank. Yet Lloyds still advertise the Faster Payment scheme and I quote... the transfer will happen almost immediately or within two hours. This is not happening yet Lloyds TSB are still allowed to continue to advertise this Faster service. I have tried seven times this last week to transfer money without success yet the recipient bank say their system is working correctly. Lloyds TSB are a disgrace and have now stopped replying to my requests for compensation.
I have tried seven times this last week to transfer money without success
J S Foster, Warrington
I work in IT, specifically in the development side, and I cannot understand why this process takes as long as it does. The banks will always use fraud as an excuse, but I would guess that 99.9% of transfers are done by ordinary people moving money around, so it's an excuse for the banks to make money. And although some banks state that they are part of the Faster Payments Scheme, they have only shaved a day off the transfer. My bank, for example, still take two days to transfer, and because I was late by one day, they charge me! Shame on them. I think this kind of sham should be outlawed!
I think this kind of sham should be outlawed!
Donald Eastwood, Leatherhead
Donald Eastwood, Leatherhead
Every month on the 25th money arrives in our Lloyds account by standing order from NatWest. On 28th various direct debits are taken. In the past we have had problems over Christmas which cost us a lot in fees so I phoned Lloyds who assured me that everything would take place on 29th December and there would be no problem. The direct debits were taken on the 29th and the money from NatWest did not arrive until 30th. Lloyds charged £20 each for the returned direct debits which they have agreed to waive because the had assured me that that wouldn't happen. I received a letter from Nationwide saying that they couldn't get a mortgage payment. I paid it immediately from our Nationwide account but they wouldn't waive their £27.50 charge and have flagged it as a late payment on our Experian file which could cause us not to get the best credit cards. I have made other arrangements now so I hope this will not happen again but I am really angry and frustrated that our money can just disappear like that and cause us so much grief and expense.
The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.