Better late than never – bounced payments grace period
New ‘standardised safety net’ for bounced payments goes little further towards customer-centric banking.
New ‘standardised safety net’ for bounced payments goes little further towards customer-centric banking, writes Anna Milne, as the Payments Council announces 22 more UK banks have signed up to the ‘retry’ system for collecting payments
So, the UK Payments Council has announced new standardisation across most UK banks to allow a grace period up until 2pm for customers to put sufficient funds in their accounts for bounced payments.
Some banks have been doing this for a year – most of the big ones, in fact, representing about 90% of current account holders. However, there was confusion as to what the cut-off time was and each bank’s time was different. Also, according to the Payments Council, most people are not even aware of this service. And, really, it’s only a proper service if they actually notify you to make you aware you need to lodge a certain amount by a certain time. You can request them to notify you, of course, but not all text alert services include this kind of notification.
However, on the whole, this is definitely a consumer benefit. The banks were creaming off something in the region of £200m a year in missed payment fees. Little wonder they don’t voluntarily give their customers a heads up on a bounced payment. So it goes a little further towards being truly customer-centric. According to Tesco’s, every little helps, and this constitutes a ‘little’ extra help, not least because Tesco Bank is one of the latest banks to sign up. A little is better late than not at all.
I do wonder how many banks will take just a little too long to clear a payment or transfer made to accommodate the bounced pre-notified payment. Hopefully, banks will see this as a means to compete and attract new customers, by offering later cut-off times and perhaps even extending the service to include bounced cheques. Sooner or later they’re going to have to deal properly with this subject of cheques.