APACS: Standing order payments rollout starts through new faster payments service

Millionth payment to be made through Faster Payments Service today.

APACS, the UK payments association, has today (6th June 2008) confirmed the start of the Faster Payments Service for standing order payments. Following the introduction of the new service for telephone and internet payments at the end of May, standing orders will now start to be processed through the new infrastructure, enabling the payments to clear on the day they are sent, on bank working days.

As with internet and phone payments the rollout will be gradual, but it is expected that the majority of standing orders will be processed faster through the new service by the end of the year. Any payment not made through the new service will continue to be processed through the existing Bacs three-day service.

For the first time, instead of taking three days to clear, the Faster Payments Service will enable standing orders to reach the recipient on the same day, providing it is a bank working day and the payment is under £100,000. Standing orders are typically used to make regular charity donations or subscriptions, for regular payments for life insurance or endowment policies, and to make regular contributions to a savings account.

Customers don’t need to do anything, but if they have a regular standing order payment, for instance to a landlord, which needs to arrive on a set date, they may wish to change it, so rather than the funds arriving early they remain in their own account for a couple of days longer. For regular payments to a savings account, there is no need to make any change to the arrangement; in fact the customer will benefit from earning extra interest as a result of the payment reaching a savings account more quickly. If customers are not sure when their own bank is rolling out standing orders on their account, they should check with their bank directly.

The introduction of the Faster Payments Service for standing orders comes following the successful start for the rollout of the service for telephone and internet payments. Since the introduction of the service, 885,719 payments have been made, to a total value of £522,383,231. The millionth payment is expected to be processed by the last settlement period today, 6th June.


ENDS

For further information contact the APACS Press Office on 020 7711 6316

The thirteen founding members are: Abbey, Alliance & Leicester, Barclays, Citi, Clydesdale and Yorkshire Banks (National Australia Group), Co-operative Bank, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Northern Bank (Danske Bank), Northern Rock, Royal Bank of Scotland Group (including NatWest and Ulster Bank). VocaLink, a separate service company, is providing the infrastructure for the Faster Payments Service.

Currently internet and phone payments account for just 2% of interbank automated payment volumes, but these are growing rapidly as customers increasingly turn to them instead of more traditional payment methods such as cheques. Standing orders account for 6% of interbank automated payments. The new system is being built to cater for the large volume increases projected for the future. The remaining 92% of interbank automated payments are 'bulk' transactions generated by organisations and businesses both large and small and are: Direct Debits, used to pay utility bills, life and general insurance premiums and various subscriptions; Bacs Direct Credits, used for salary payments, pensions, and state benefits; and CHAPS payments.

There is a maximum limit placed on the value of each payment sent through the Faster Payments Service, with the maximum value for internet and phone payments set at £10,000 and standing orders to £100,000. During this launch period some banks are adopting lower limits than those figures.

The logo for the Faster Payments Service is available on request from press@apacs.org.uk

APACS has produced an online easy-to-use sort code checker www.canipayfaster.co.uk. Customers can input any UK sort code to check whether it is able to receive Faster Payments. More sort codes will be added over the next few months as the service is rolled out

An animated graphic and advice guide for using the new Faster Payments Service are also available on the APACS website, www.apacs.org.uk, or from the APACS press office, press@apacs.org.uk