Faster banking comes will come in slowly
Ever since supermarkets and the like have opted not to take cheques, it has been a source of irritation that online shopping deducts immediately from the account, but any transfer into an account can take up to three or four working days. That could be about to change, slowly of course as the Faster Payments Service enables banks to process payments made over the internet or by phone within hours, not days, speeding up the clearing of payments. UK payments association Apacs said that after going live just after mindnight on Tudsday by 7am Wednesday, 898 payments had been made to a value of £461,383.43.
The newly launched faster payments service, which provides near real-time processing of phone, online and standing order money transfers, could also of course increase the risk of fraud, according to analysts. The multi-million pound system, which was developed by financial services company VocaLink and backed by 13 banks, went live just after midnight on Tuesday, 27 May, six months later than originally scheduled.
Risk analyst at Deloitte and Touche, Stephen Ley said that the number of fraudulent payments could arise because banks will have less time to spot unusual or suspicious transactions. “The Faster Payment system will be a challenge for banks which could lead to increased risk of fraud as it will be harder for banks to detect and block fraud in the time window available. The existing process relies, in part, on banks having sufficient time to detect suspicious transactions," he said.
Apacs reaction is: "Security is an integral part on every level of every payment system and the security checks that have been put in place with the Faster Payments Service are robust. Specifically there are checks that the sending bank will make, a level of security within the central infrastructure and additional checks carried out by the receiving banks."
Apacs acknowledged that some payments may be delayed so that "further examination into them can be undertaken". "No payment system is infallible and like always, should you become an innocent victim of fraud you will be protected under The Banking Code," it added.
Different banks will phase in the system in at different times, with only around 5% of internet and telephone payments being processed by the system from launch. By the end of the year the majority of the UK’s internet, phone and standing order payments are expected to be made using the new system.
"Some financial institutions are placing lower initial limits on the value of payments that can be sent or alternatively they may be choosing to phase rollout across their customer accounts," said Apacs.
Elizabeth Sipiere, banking MD at financial IT systems provider Microgen, echoed Ley's comments and advised banks to ensure that they still retain control and visibility of transaction processing.
"The UK Faster Payments Service is the biggest change in consumer payments since the introduction of the direct debit," she said. "It is imperative that banks ensure they have the right processes and safeguards in place to support the initiative. Many will have invested in technology to ensure faster transaction processing. However, it is those banks that can see the logic behind every transaction without sacrificing speed that will be best placed to lead the field as their customers will be better protected against fraud and be able to benefit from the faster transfer speeds that we all crave."
Source:http://www.computerworlduk.com
Webs: http://www.apacs.org.uk/
http://www.vocalink.com/VocaLink/En/Home/