Costly delay for cheques and e-payments in sight if consumers agree to be charged

The head of the body that regulates Britain's direct debit payments has spoken out admitting the BoE "had a point" last week when it called for faster cheque clearance and quicker electronic transactions.

The UK has recently come under the spotlight when compared to its European neighbours for the three-day delay it takes for banks to process customer payments.

Freelance UK last week covered Mervyn King's comments at Mansion House, when he ruled it was "disappointing" British banks took longer than any other G10 nation to complete transfers.

Now Marion King, direct debit chief and head at the BACS, has said faster banking procedures need to be looked at for enterprise as well as consumers.

She reflected on the governor's keynote speech: "He has a point when we compare ourselves with Europe."

"We would welcome a faster clearing cycle and more choice, not just for the consumer but for businesses."

Yet, BACS did say putting the UK on a competitive level with its speed of financial transfers may mean consumers or business are forced to pay a charge for a service upgrade.

"At the moment, clearing payments is seen as a general part of your banking service," explained Ms King.

"Those wanting a faster service may have to accept a charge – but it is not as straight forward as shifting up a gear. It will require a significant change to the industry which will take time."

The Daily Telegraph reports the Office of Fair Trading is investigating the problem of slow electronic payments that can often take five days for businesses to complete, compared to just a few hours in Sweden.

In March this year, the OFT declared high-street banks should pay interest to customers for the time it takes electronic payments to clear.

Last year UK banks investing customer cash in overnight markets made £26bn in profit.

 

30th June 2004

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