The UK payments association APACS has announced a new banking payment system which will allow transfers between many bank accounts to be almost instantaneous.

The faster payments clearing service is due to be be introduced on 27th May 2008, and from this date one-off telephone and internet payments will be credited to the receiving account within a few hours.

The system was initially to be brought in last November, but was delayed after concerns over technical issues. It will allow same-day payments of up to £10,000 between the thirteen financial institutions which have founded the service. The banks involved are: Abbey, Alliance and Leicester, Citibank, Co-operative Bank, HBOS, HSBC, Lloyds TSB, National Australia Group, Nationwide Building Society, Northern Bank, Northern Rock and Royal Bank of Scotland / Natwest.

It is thought that competition will drive other institutions to join the system. So far banks have been coy about plans to charge for the new service with the exception of Natwest, who have indidcated the transfers will be free of charge for personal banking customers.

Direct debits, which are already credited the same day, will be unaffected by the changes. Standing orders will now be credited the same day only on banking days. Payments by cheque will also be unaffected.

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