faster payments???

money.seeker · 23 January 2009 at 11:09PM

Milarky wrote: »

They can't 'opt out' of the process unless they arrange to bank in a particular 'branch' (i.e. sort code) which is not enabled to receive these payments. This is most unlikely to be the case where they maintain a single 'collection' account, and the customer merely quotes their passbook number as 'reference'. Depending on who they bank with, therefore, the majority of Building Societies can now receive faster payments.

Exactly. And with no IT system in place to distribute these payments to the relevant reference numbers, the payments would have to be distributed manually. This is not a good thing.

shoe_girl_2 · 23 January 2009 at 11:34PM

Bank of scotlands has been working fine this week, been using it to tidy up accounts

Mikeyorks · 23 January 2009 at 11:54PM

The smaller Building Societies are 'agency banks'. Just because the host Bank is FP enabled and therefore SOs etc from outside get into the agency bank settlement account faster ... isn't the same as the agency bank updating the client account quickly.

The agency bank needs to forge a real time link from the settlement account into the client account ..... but a lot haven't (yet) done that. But there will be regulatory pressure on them to conform ..... as they're generating 'float' interest in the gap between the accounts. Which, of course, FP was designed to eliminate.

Mikeyorks · 23 January 2009 at 11:59PM

money.seeker wrote: »

And with no IT system in place to distribute these payments to the relevant reference numbers, the payments would have to be distributed manually.

Dubious. Unless very small .... most would have an overnight Batch system in place to extract the payments from the receiving account with the 'host' Bank - and into the Building Society accounting system. But now .... they need a close to realtime system?

money.seeker · 24 January 2009 at 12:31AM

Mikeyorks wrote: »

The smaller Building Societies are 'agency banks'. Just because the host Bank is FP enabled and therefore SOs etc from outside get into the agency bank settlement account faster ... isn't the same as the agency bank updating the client account quickly.

The agency bank needs to forge a real time link from the settlement account into the client account ..... but a lot haven't (yet) done that. But there will be regulatory pressure on them to conform ..... as they're generating 'float' interest in the gap between the accounts. Which, of course, FP was designed to eliminate.

Thanks for your reply. I know my scenario sounds like worst case scenario but it's good to know that there will be pressure from regulators to prevent anything like this from happening.

Mikeyorks · 24 January 2009 at 12:42AM

money.seeker wrote: »

I know my scenario sounds like worst case scenario but it's good to know that there will be pressure from regulators to prevent anything like this from happening.

Not really 'worst case' as it was almost inevitable the agency banks would drag their feet ... after all some of the participating Banks aren't exactly trail blazing? And we are now a year and two months (Nov 07) after FP was supposed to be in and 8 months after (May 08) there was a 'whoops - just needs a bit more testing'.

There will be regulatory pressure .... but it won't be yet for a while.