A new current account switching system will launch on September 16th, a month from today, which will allow consumers to switch banks within seven days.
Participating banks and building societies will be required to process current account transfers within seven working days – around quarter of the time it can currently take.
33 banks and building societies are signed up ahead of the September launch, covering the vast majority of current account providers. Tesco Bank will join the system next year, when it prepares to launch its own current account range.
The Payments Council’s £750 million switching system takes care of inbound and outbound payments (Direct Debits, standing orders, etc), removing much of the stress involved in a transfer.
It also redirects any payment activity from the old account to the new one for 13 months, so customers will not be affected if an employer takes time to update their details.
And if anything goes wrong with the switch, customers are guaranteed to be refunded for any charges incurred.
Find out more about the switching system and see a full list of its participants in our guide.
The new system was developed following recommendations made by the Vickers banking commission in 2011 to improve competitiveness between banks.
The chief executive of the Payments Council, Adrian Kamellard, said: "We look forward to a new era of account switching which will lead to greater choice for customers and wider competition in the marketplace.
"After two years of work and commitment by the Payments Council and financial institutions to develop this new standardised switching service, today marks a significant day for all parties involved."
Keith McDonald
Which4U Editor
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