GBP 5 billion is the estimated costs to roll-out Bank Accounts portability in United Kingdom, as similar to mobile phone numbers portability. As this is too expensive, the Payments Council of United Kingdom invested GBP 750 million, to roll-out the Bank Account Switching Program.
The main difference between ‘Portability’, and ‘Switching’, is that under:-
a) ‘Portability’,-the same bank account number can be used across banks.
b) ‘Switching’,- a new bank account number is allotted, but, payments in or out of your old account will be automatically re-directed for a period of 13 months, to cover once-a-year payments too.
This program is driven by UK Payments Council.
The Bank Account Switch Program was conceived as recommended by the Independent Commission on banking to reduce the dominance of ‘Big Four’, high street banks in UK.
The scheme is one of the measures recommended by the UK Independent Commission on Banking, with the aim of creating greater competition in the market dominated by the ‘Big Four’ high street banks, offering a ‘hassle-free’ means of swapping provider.
Once the new program takes off, the time taken to move accounts from a current average of between 18 to 30 days, will reduce to 7 working days.
The account switching service will be independently controlled, based on a central platform run by Bacs and using VocaLink’s automated clearing house (ACH) processing systems to automatically redirect payments from one account to another.
The highlights of this Program:
The service is free to use
- The switch will be completed in seven working days – a substantial improvement on the current process that can take between 18 and 30 working days
- The customer can choose and agree the switch date with their new current account provider
- The new Current Account Switch Guarantee means that you will receive a refund of interest and charges on your old and new current accounts if anything goes wrong with the switch.
As on 23/07/2013, 33 bank and building society have joined the Bank Account Switch program.
- There’ll be a new bank account switching service in September (newstatesman.com)
- Bank account switching date confirmed (uswitch.com)
- Switching bank accounts to be made easier (standard.co.uk)
- Brits Can Switch Banks In A Week From Next Month (news.sky.com)