From May, businesses will be able to have UK internet,
telephone banking and standing order payments cleared in as little
as 15 seconds instead of three days.
The Faster Payments initiative, offered as a service by
VocaLink, will transform UK payments from the slowest in Europe to
the fastest.
Businesses will benefit by receiving money more quickly, but
faster payments will put their internal IT systems and
processes under pressure and they will need ensure their IT systems
are ready.
Gareth Lodge, analyst at TowerGroup, said businesses might not
be able to benefit from faster payments if their enterprise
resource planning (ERP) systems cannot keep pace.
"Corporates will receive payments throughout the day and it is a
question of whether their systems are capable of keeping up to
speed with this. If they do not realise they have been paid, they
will not harness the full benefit of a quick payment."
The risk of losses to error will also increase because once
payments are cleared under the scheme, they cannot be revoked. This
means the payee must get the transaction right the first time.
Lodge said businesses using Faster Payments would have to have
systems in place to ensure payments were made correctly.
"Businesses have to be careful that the payments go to the right
person and the person sending the payment is authorised to do so,"
he added.
Banks are preparing for faster payments by installing
sophisticated technology to check payments automatically.
Barclays, for example, is extending the use of modulas
checking, which makes sure account numbers and sort codes are
compatible.
A spokesman said, "At the moment we do it in some areas, but not
in many. But with faster payments coming in May, this is a
must-have for all transactions."
Earlier this month, the
Royal Bank of Scotland announced it would implement technology
from Experian Payments to carry out thorough checks of payees and
recipients, as well as checking that payments follow typical
patterns for the business customer.
Jane Barber, the bank's head of product development, said the
arrival of faster payments, combined with the
Single European Payments Area (Sepa), meant banks' systems must
be upgraded to reduce errors and costs.