Jul 2010 Often a matter of difficulty for banking institutions is trying to convince their customers of the necessity of the amount of clearing times needed for funds.
Because of this a significant number of consumers have complained to the Office of Fair Trading about the unfairness of the situation. This led to the Faster Payments Service (FPS), introduced in May 2005 to allow for phone and internet payments to be transferred between accounts in as little as two hours. In reality this can be as little as two minutes. Nevertheless, the inconvenience of having to wait days has been removed. This system has now been largely adopted by all the major UK banks.
The company now running these processes is Immediate Payments Limited. They were awarded the contract by the Office of Fair Trading’s UK payments division. This system would appear to make sense in an age where anyone can do all of their banking on the internet, it is a logical progression.
An additional benefit of this is that transactions can be requested and processed at any time, 24 hours a day, every day of the year. Standing Orders have now also been included into the Faster Payments Service, although the request can only be made on a working day.
There are three types of payment that can be made through the Faster Payment’s Service. They are: Single immediate payments, forward-dated payments and standing orders.
Single immediate payments are made by the customer, who requests the transaction either by telephone or online and the payment goes through in the average of two hours. Once the payment has been set up on your account the next time you pay the same person or organisation you will not have to enter all of the details again as their account details will be saved in your payments list.
Forward-dated payments are the same as single payments except that you can set a date in the future when the payment is to be made. These have the advantage over standing orders in that they can be processed on non-working days.
Standing orders are payments made on the same date each month and for the same amount (unlike Direct Debit which is variable).
As the majority of these transactions are carried out by the user on the internet it is imperative for the user to make sure they enter the correct details in order to minimise any errors. Ensure you enter the correct account number and check bank sort code tables online to make sure you are entering the correct sort code for your branch. If the money ends up somewhere else you may have to wait days for the transaction to be reversed. Either way make certain that you check and double check. Bank sort code search facilities are available to help you, letting you enter your banks postcode online. This will provide you with the correct sort code.