Payments Portability: Easier Bank Account Switching
- The UK Payments Council has set deadline to September 2013 for full portability of payments from one bank to the other in the UK, for individual customers and SMEs. When a customer changes bank, his account number remains the same and all recurring operations can be transferred without his having to intervene.
- For now, outgoing payments can be transferred directly (direct debits and standing orders). Nevertheless, this project, documented by the Independent Commission on Banking (ICB), also aims at automating incoming credit transfers (wages, social benefits, etc). The ICB also wishes to reduce the required period to switch an account from 18 to 7 working days.
- The Lloyds Banking Group deemed that 2 billion pounds would be needed to set up a compromise project encompassing an interbank database to store account numbers and due dates for direct debits or other recurring operations. According to Lloyds Introducing full account portability would cost 5 million pounds.
- The Council is currently studying the existing system, recommendations and assessing the required budget. According to the banks, the first improvements will be visible before the 2013 deadline.
- Account portability exists in France since the 2008 commitment of the FBF, but its modalities are less ambitious. The account holder’s new bank is in charge of processing the information and repatriating payments on his behalf, basing itself on the indications he provides. There is no technical platform or interbank processes.
- In the UK, this project will complement the effect of The PSD.