Same day money transfers arrive - slowly
More than eight years after the banks first promised to speed up the three working days they take to move our money from one bank to another it has finally happened Almost. From Tuesday 27 May APACS, which runs the plumbing our money travels through, guarantees the new Faster Payments will arrive within two hours. But in practice it takes only a couple of minutes for the money to appear in the recipient’s bank account. The new system will work 24 hours a day seven days a week – including bank holidays!
Unfortunately the banks are starting the new system cautiously. Although most will let customers receive faster payments from 27 May almost all will be imposing restrictions on sending money. Only Royal Bank of Scotland, which includes NatWest, will operate the system fully from this week. Others, like HSBC and LloydsTSB, say full operation will happen next week. A few such as Abbey, Citibank and Co-op are not starting at all until later this year. And a middle group starts this week but only in penny numbers. Barclays, for example, will let you transfer up to £1, a limit which will rise slowly over the next few weeks.
It will be at least the end of the year before the twelve banks and one building society (Nationwide) which set up the system will all allow payments up to the limit of £10,000 to be sent. The banks deny that the slowness is due to the fact that they make between them an estimated £30 million a year by hanging onto our money during the three working day transfer.
Outside the founding group things are even slower. The other 58 building societies use the major banks to do their clearing and it will be up to the banks to decide when they can use the new system. Some companies offering bank accounts such as Tesco, Sainsbury’s, the Post Office and Saga are in a similar position. And foreign banks operating in the UK such as Icesave and ING have no clear timetable for when they will be able to offer instant transfers.
Even when the system is in place for personal and business accounts it may still take three days or more for money to reach your credit card account. And faster payments will never apply to cheques. Their days must now be numbered.
You can find out if your account can receive money under the new system at www.apacs.org.uk/sortcodechecker/index.html but you have to contact your own bank or building society to find out when you will be able send faster payments. Here is what they have said publicly.
Abbey (earliest opportunity), Alliance & Leicester (late summer), Bank of Scotland (August/September), Barclays (16 July), Citibank (later this year), Clydesdale (by the autumn), Co-operative Bank (starting in July), Egg (later this year), firstdirect (end of June), Halifax (August/September), HSBC (end of June), Intelligent Finance (August/September), Icesave (no definitive timetable), ING (as soon as possible), Lloyds TSB (6 June), Nationwide Building Society (end of 2008), NatWest (27 May), Northern Bank (later in 2008), Northern Rock (date to be finalised), Royal Bank of Scotland (27 May), Smile (starting in July), Yorkshire Bank (by the autumn).
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