The new service is proving popular - and card use is ont the up too, the payments service says.
The first figures for the new Faster Payments service were released today.
APACS, the UK's payments association, said that the new system has processed around four million transactions over its first two months of operations. Currently, Faster Payments - which offers near-instantaneous transfers of funds between accounts - is now dealing with around 250,000 payments per day.
Other payment services were found to have fallen, however. The value of CHAPS payments, for example, fell by 4.2 percent over the 12 months to June 2008 - while cheque and credit clearing volumes declined over ten percent across the same period.
Elsewhere, APACS found that for April-June 2008, around 1.8 billion purchases totalling £92.6 billion were made in the UK with plastic cards. This is 7.8 percent higher for purchases and 7.5 percent higher for expenditure than over the same three months last year.
General lending, including mortgages, personal loans and credit cards, hit £32.8 billion for April-June. Repayment totals, however, came to just £30.7 billion.
This suggests that people are collectively taking out much more credit than they are paying back, potentially increasing their chances of becoming locked into a debt spiral. Indeed, recent figures from charity Credit Action have shown that total levels of personal debt in the UK are approaching one and a half trillion pounds.
Faster Payments was launched on May 27th.
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Comments (2)
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Adrian Stafford-Jones
19th Aug 2008 10:19
Better late than never – faster payments finally gets support
Finally the UK market is realising how important the faster payments initiative is for businesses, particularly during the credit crunch. It is quite unbelievable that industry as a whole has taken so long to recognise just how beneficial faster payments is; in terms of saving costs and time and easing cash-flow, faster payments could even save an SME from bankruptcy.
It should now be clear that paper payments hinder financial processes whilst electronic funds transfers can almost eliminate cash-flow problems.
29 per cent of SMEs responding to recent Bacs research declared they could go bankrupt with overdue invoices of just £20,000 and spend 38 days a year chasing late payments. These figures alone highlight the false economy of relying on cheques instead of switching to financial software that could avert this stress and potential ruin.
EFT packages provide solutions that allow Bacs payments and take advantage of faster payments, reducing transaction costs and decreasing data errors. Business owners can relax, knowing that monthly payments will be collected by Direct Debit (DD) automatically on a date agreed at the outset of negotiations. The business owner takes control of collecting payments, eliminating the need for endless cheque chasing.
The Bacs research showed astonishing numbers of SME owners were still entrenched in archaic processes that stall business and add to the already bleak national picture of an economic downturn.
Now that faster payments is being fully embraced by the market, that picture looks altogether brighter.
Adrian Stafford-Jones
Managing Director
Albany Software
H.A.McCallum
6th Sep 2008 13:02
Why is it taking the A/L visa MBNA credit card 2 to 3 working days to credit your account when paid on line?Surely that is to long?
