OFFICE OF FAIR
TRADING News Release (34/09) issued by The Government News Network
on 25 March 2009
The time it takes
for electronic bank payments and cheques to clear for consumers
has speeded up but further improvements are needed, the OFT
announced today in its Review of the Payments Council.
The Review has been carried out to look at how the Council is
measuring up in making the payments industry work for consumers
and businesses.
The OFT found that there is much more effective strategic
direction of the industry since the Payments Council was set up in
2006. Key improvements the Council has overseen include the
speeding up of slow cheque clearers as well as the implementation
of the Faster Payments Service, which allows consumers to make and
receive payments within a matter of hours rather than previously
having to wait for up to three working days.
However, the OFT also found that the Council's progress has
been disappointing in some areas. It is still too slow in driving
improved payments for customers, with the Faster Payments Service
only operating at 69% capacity across member banks. Also, more
attention needs to be given to the Council's integrity
objective, which includes putting plans in place to ensure that if
one payment system fails, the others can take the strain. The
Council should also be more proactive in establishing where
improvements are necessary, rather than reacting to external pressures.
Cavendish Elithorn, OFT Senior Director of Services, said:
"The Payments Council is a real improvement over the
previous governance arrangements of the payments industry. But
more work is needed to sharpen the Council's focus on the
flexibility and efficiency of its systems and to make sure
benefits are passed on to the end-user.
"This is why we have recommended measures to ensure the
Council delivers transparently and fully on its objectives to make
the payments industry work well for both consumers and business."
Main recommendations coming out of this Review are that the
Payments Council should:
* Focus on the delivery of actual benefits to consumers,
including ensuring the Faster Payments scheme is rolled out fully
across all member banks.
* Commission an accountancy firm to report in two years on how
well it has performed against its integrity objective.
* Provide a self-assessment against its objectives every two
years, which must include a consultation with stakeholders.
The Review of the Payments Council is available at: http://www.oft.gov.uk/shared_oft/reports/financial_products/oft1071.pdf
NOTES
1. The Payments Council was set up in 2006, resulting from a
recommendation of the Payment Systems Task Force. The speeding
up of cheques and the Faster Payments Service was agreed by the
OFT-chaired Task Force and the Payments Council oversaw their
implementation. http://www.oft.gov.uk/shared_oft/reports/financial_products/oft901.pdf
2. The Task Force agreed the OFT would review the work of the
Council after two years to score its performance against its three
main objectives, look at its broader success in facilitating
progress in payments systems within its remit and look at its
effectiveness to provide lasting change in the payments industry
and to set a development plan for any areas of concern.
3. The Payments Council first met in March 2007 and assumed
responsibility for setting the strategy for UK payment systems and
ensuring that that they meet the needs of users, payment services
providers and the wider economy.
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