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UK Payments Council responds to criticism of Faster Payments

Published on Tuesday, August 18, 2009

The UK Payments Council has moved to defend itself after receiving criticism from the Office of Fair Trading (OFT) regarding the slow roll-out of the Faster Payments Service (FPS).

In a review of the Payments Council issued in March this year, the OFT claimed that it had not been quick enough in its attempts to drive more efficient payments for consumers, citing that FPS was reportedly only operating at 69% across member banks.

Brian Pomeroy, chairman of the Payments Council, recently stated in a written response: "We were disappointed with some of OFT's comments about our role in the delivery of Faster Payments (FP), since we had believed from our regular contact with the OFT, over a period of two years since we started, that you supported our interpretation of the Payments Council's role in FP and the way in which we have played it."

Pomeroy also defended the slow take-up of FPS by UK banks, insisting that the Council's constitution did not give it "firm levers" to control the way they offered the service to their customers.

The fact that not every bank is offering the full service to its customers yet has clearly had an impact on the uptake of FPS in consumer banking. It is clear, however, that FPS should experience an increase in submissions when Direct Corporate Access -the business arm of FPS- is fully implemented, but unfortunately there are those who won't be able to make use of it due to Barclays initially being the only bank to offer it.

Additionally, bureaux and their customers look set to benefit from quick, cost effective funds transfers. This will enable them to offer FPS either as a contingency or a regular use method in such times as the 3 day Bacs payment cycle simply isn't quick enough. In order for these transfers to happen, though, the bureau in question must be sponsored by Barclays and it will only be able to submit files on behalf of clients who bank with Barclays - not for those who bank elsewhere.

Ensuring the rest of the banking world adopts Faster Payments should now be the Payments Council's next task, so as to allow it to reach the heights of which it is clearly capable.