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Payment systems (Society for Worldwide Interbank Financial…
Payment systems
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Cheque Clearing System
- The payee sends the cheque to their bank
- The payee's bank sends the cheque to central clearing
- Central clearing forwards it to the main clearing department of the drawer's bank
- The clearing department of the bank then sends the cheque to the branch at which the bank account is held
- If funds are available, the cheque will be cleared for payment by the drawer's branch
If there are insufficient funds to clear the cheque, the cheque is returned unpaid
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In November 2007, changed to the cheque clearing cycle came into force, known as the 2-4-6 and the 2-6-6 cheque clearing timescale changes, these gave customers increased clarity and certainty with regards to the timescale involved in the clearing of the cheque
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For savings accounts, the maximum time limit for withdrawal is longer (six days) and is known as 2-6-6
The clearing system does not operate on Saturdays, Sundays or bank holidays
Faster Payments
Introduced in 2008 and was the fist new payment service o be introduced in the UK for more than 20 years
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UK Payments Administration Limited started the Faster Payments initiative to improve the speed of lower-value transactions, to be used in parallel with the CHAPS and BACS systems
Enables the movement of telephone, internet and standing order payments
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Up to £100,000 although individual banks have set their own transaction limits for their customers
Funds usually read the receiving customer's account within two hours however payments may be made within minutes
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Paym
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Account holders who wish to receive funds through Paym must register both their mobile number and the relevant current account with a bank or building society that is participating in the scheme