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There’s a double high five for the Current Account Switch Service this month as it celebrates its fifth anniversary alongside a new high for current account switching volumes. Since the service launched in September 2013, more than five million people, small businesses, and charities have moved to an alternative current account provider.
Heralding a step-change in account switching reliability, ease, and speed, the service has grown to include 47 participating banks and building societies, that’s over 99 per cent of the UK’s current account market.
Now part of leading retail payments authority, the New Payment System Operator (NPSO), the Current Account Switch Service has proven an effective catalyst for greater competition in the market with around 80 per cent of consumers aware of the service. Satisfaction rates stand at 94 per cent, underlining the service’s position as a staple part of the banking landscape.
And that’s not all. The service has also redirected tens of millions of payments mistakenly applied to old bank accounts, and extended that safety net for as long as the facility is needed, making sure that all stray payments are redirected to the correct account.
As one of the biggest barriers to switching – particularly for businesses – was the fear of payments going missing, this is one key hurdle that’s been overcome.
In addition to the operational successes of the service, it continues to prove an example of best practice for other UK industry sectors, where steps to simplify switching could herald improved outcomes for consumers and businesses, such as the energy and water markets.
Anne Pieckielon, director of product and strategy at NPSO subsidiary, Bacs Payment Schemes Limited (Bacs), is responsible for the Current Account Switch Service. She said: “Our team has responsibility for the strategic direction of the Current Account Switch Service and we have worked hard to put the needs of consumers and businesses front and centre; everything we do is aimed at delivering better outcomes for all those who would benefit from switching.
“To gain a deeper understanding of what factors shape and impact decisions to switch current account provider, we have collaborated in major research projects, working hard to build an holistic picture of the levers and trigger points involved in the switching journey. The result is a service that works for individuals, small businesses, small charities and trusts.”
Paul Horlock, chief executive of NPSO, said: “Reliable, stress-free switching empowers people to get the best from their financial services and, for five years, the Current Account Switch Service has ensured that consumers, small businesses and charities have had the confidence to switch. This has helped deliver not only better outcomes for all, but a more competitive market, as it has never been easier for bank customers to vote with their feet.
“As part of the NPSO, the Current Account Switch Service is perfectly placed to continue this vital work and help further drive collaboration, innovation and thought leadership across the sector, and beyond, in the months and years ahead.”
The fifth anniversary is being supported with new multi-media marketing campaigns encompassing TV, digital, out of home and social media activity.
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Notes to editors
For further press information, please contact:
Daniel Scaife, PR and Social Media Manager
M: 07961 496825 E: firstname.lastname@example.org
Kerris Macauley, Head of PR
M: 07974 326373 E: email@example.com
Founded in 1968, Bacs has processed over 125 billion payments in the last five decades. In 2017, a record 6.34 billion UK payments were made this way with a total value of £4.9 trillion, including over 4.2 billion Direct Debits. A new record was also set on 31 August 2018, with 114 million transactions processed in a single day.
On 1 May 2018, Bacs Payment Schemes Limited became a wholly owned subsidiary of the new home for UK retail payments, the NPSO. The responsibility for the operations of Direct Debit, Bacs Direct Credit, the Current Account Switch Service, Cash ISA Transfer Service and the Industry Sort Code Directory were handed over to the NPSO.
The Bacs payment systems are recognised as systemically important infrastructure under the Banking Act 2009. This means that, as the owner and operator of Direct Debit and Bacs Direct Credit, the NPSO is regulated by the Financial Markets Infrastructure Directorate at the Bank of England.
For further information please visit www.bacs.co.uk
About the Current Account Switch Service:
Key features of the Current Account Switch Service include:
- The service is free to use.
- The switch will be completed in seven working days – a substantial improvement on the previous process that could take between 18 and 30 working days.
- The customer can choose and agree the switch date with their new current account provider.
- All payments going out (e.g. Direct Debits) and those coming in (e.g. salary) will be moved from the old account to the new account.
- Payments accidentally made to or requested from the old account will be automatically redirected to the new account for as long as the facility is required.
- The Current Account Switch Guarantee means that the customer will receive a refund of interest and charges on their old and new current accounts if anything goes wrong with the switch.
As of 1 April 2015, the eligibility criteria for businesses, charities and trusts was extended. SMEs with a turnover of up to £6.5 million, small charities with an annual income of less than £6.5 million, and small trusts with a net asset value of less than £6.5 million can switch their current account provider using the Current Account Switch Service.
The service was previously available for small businesses with a turnover of 2 million euros (or sterling equivalent); and this extension increases the reach of the service to 99% of the UK’s SME market.
Bacs is responsible for all aspects of the service including working on the recommendations in the Financial Conduct Authority’s ‘Making Current Account Switching Easier’ report, and the findings from the CMA’s market investigation into retail banking.
About the New Payment System Operator:
NPSO Limited is the holding name for the company that has been set up to consolidate Bacs Payment Schemes Limited (Bacs), Faster Payments Scheme Limited (FPSL), and the Cheque & Credit Clearing Company Limited (C&CCC) which incorporates the Image Clearing System (ICS) that will replace the paper processing system for cheques currently managed by C&CCC. These retail payment systems, which process over £6.4 trillion worth of payments every year between them, are joined by UK Payments Administration Ltd (UKPA), which provides people, facilities and business services expertise to support the systems behind the payment system operations.
Bringing all of these retail payment services together will reduce complexity and risk, providing a platform for innovation. The company will support a vibrant UK economy by enabling a globally competitive payments industry in the UK.