The UK’s 46 million current account holders could benefit “simpler world” for current account switching, as 33 providers sign–up to provide new service and more are expected to follow in 2014.
The Current Account Switch Service promises “seven-day” switching formally introduced to make switching current account “simpler, reliable and hassle-free”.
The service, led by the Payments Council, will mean that switchers will no longer need to liaise with their previous provider, and new providers will take responsibility for ensuring that any payments to or from the individual’s old account are migrated over.
The switcher’s old account will be closed and any payments accidently directed to it over the 13 months following the switch will be processed via a central redirection system that will “capture” payments and send them on to the switcher’s new account.
Customers will also be able to select the date on which they wish to switch between accounts.
It is hoped that the new system will promote greater competition between current account providers and encourage consumers to find an account deal best suited to their needs.
Commenting on the launch Caroline Rookes, of the Money Advice Service, said:
“Having the wrong current account can cost you money. To avoid losing hundreds of pounds through charges or lost interest it makes sense to check whether your account fits with how you use it and if not to switch as soon as possible. The According to the Payments Council just 2 million current account users switched accounts last year and it’s been suggested that this number could increase by more than two-fold following the introduction of the service.
Adrian Kamellard, Chief Executive of the Payments Council, comments:
"Over the past two years multiple financial institutions have come together to design and implement this new, free and standardised service which will raise the bar internationally for retail banking.
"Compared with what the industry could offer before, the new Current Account Switch Service delivers a process in which consumers can now have confidence and trust, which is backed for the first time by the Current Account Switch Guarantee.
The new service also removes the barriers to switching that used to exist by making the whole process simple and hassle-free. Switching times will also be dramatically reduced to just seven working days and crucially we have put customers in control of their own switch date.
"We will watch with interest over the next few months to see the effects that come as a result of the new, simpler world of current account switching."