Internet and phone transfers can now be cleared in a day using the new Faster Payments Service.

A new Faster Payments Service, which allows one-day cash transfers to be made over the internet or telephone, has launched today (27 May).

The new £300 million scheme enables customers to make internet or phone payments outside of banking hours – including weekends.

From 6 June 2008, it will also be used to speed up standing order payments, enabling them to be cleared on the day they are sent – as long as it is a bank working day.

Previously, bank to bank transfers took up to four days to process – making banks an estimated £30m in extra interest.

The new service has been developed by 13 banks, including Barclays, HSBC, Lloyds TSB and Yorkshire Banks.

Once fully operational, customers will be able to transfer a maximum of £10,000 a day, whilst standing orders will be limited to £100,000.

UK payments association, APACS, estimates that payments totalling over £450,000 were made in the first seven hours of the scheme’s midnight launch.

The association expects that the majority of the UK’s internet, phone and standing order payments will be made using the new system by the end of 2008.

For more information, visit www.apacs.org.uk

By Natasha Piscitelli