Banks may charge for fast money transfers

Banks may charge for fast money transfers

Britain's high street banks will speed up the time it takes to transfer money through standing orders and over the internet but could charge a fee to recoup their costs, the Office of Fair Trading said yesterday.

Any fee would be frowned upon by customer groups but would be a way to allow the banks to cover the cost of processing automated payments on the same day or overnight compared with the three days it currently takes, the competition watchdog said.

The industry estimated it would cost £65m to make the changes to speed up automated payments - standing orders, internet payments and telephone transactions - after 12 months of talks with the OFT's payments systems taskforce.

The watchdog is turning its attention to cheque clearing, the ATM network run by Link and the credit card schemes operated by Mastercard and Visa as well as debit cards.

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The taskforce was set up by Gordon Brown last year in response to the Cruickshank report on banking in 2000. It calculated that the "notional net benefit" of the faster service could be between £748m and £1.3bn over 10 years. It confirmed that it would take two-and-a-half years for the changes. The banks are being given six months to devise a system for same day or overnight transactions and two years to implement it.

The Forum of Private Business said there would be "disdain" that same day and overnight clearing of automated payments would take until November 2007.

Ed Mayo, chief executive of the National Consumer Council, said: "A donkey could deliver cheques faster than banks can put money into customers' accounts."

Guardian Unlimited © Guardian Newspapers Limited 2005