The UK banking industry has delayed the delivery of the £300 million UK Faster Payments system by six months after VocaLink, the payments processing provider overseeing the system-build, missed its testing deadline, reports Finextra. 

The new service, which aims to introduce near real-time transfer of consumer payment orders over phone, online and through standing orders, will now be delivered at the end of May 2008 the Association of Payment Clearing Services (APACs) said on Tuesday. The Faster Payments initiative, which was forced upon the reluctant banking industry by the Office of Fair Trading following a review of the prolonged consumer payment clearing cycle, was originally slated for introduction this coming November.

According to APACs, the delay results from unforeseen complexities in the testing of the new service, which has proved more time-consuming than originally expected.

In a statement on Tuesday, Apacs said: “The revised timescale will allow sufficient time for the further rigorous testing required at both the centre and by banks to ensure customers can benefit from safe and secure faster payments.”

Backed by 13 clearing bank members, the scheme – which hopes to overhaul much of the creaking UK payments infrastructure – is technically demanding and has encountered significant integration challenges.

For the banking industry – which is already beset by major European, IT-driven regulatory initiatives including MiFID and SEPA – the scheme also holds few inbuilt incentives, aiming essentially to remove the highly profitable three-day buffer period worth £30 million annually, that has traditionally delayed personal payments in the UK.

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