Source: ITN - A new faster banking system has been launched to enable payments to arrive on the day they are made.

Industry body Apacs is rolling out its Faster Payments Service, which will allow same-day payments by telephone, online and through standing orders, cutting the processing time from three days to a few hours.

It will also be possible for people to make payments over the phone and internet at any time of the day and on any day of the week.

But the launch comes amid reports that experts are concerned the new system could put consumers at greater risk of fraudulent payments as banks may have less time to detect suspicious transactions.

Security analysts are understood to be concerned that fraudsters could complete transactions before banks are able to spot them.

Stephen Ley, a risk expert at Deloitte & Touche, said the new system will be a "challenge" for banks.

"It will be harder for banks to detect and block fraud in the time window available," he reportedly said.

The system will be phased in gradually, with only around 5 per cent of internet and telephone payments being processed by the system from Tuesday.

The system will be used to process standing orders from June 6 and it is hoped that at least half of all payments will be processed using it during the summer.

The 13 founding banks, which include the five main current account providers Barclays, Halifax Bank of Scotland, HSBC, Lloyds TSB and Royal Bank of Scotland Group, will gradually implement the service for their customers during the coming months.

Two of the banks - Abbey and The Co-operative Bank - will not join the launch, but will follow suit within three months.

Apacs said the phased in launch will allow it to monitor the system and help police any potential increase in fraud.

Sandra Quinn, director of communications for Apacs, said: "Fraud has been at the heart of the discussions in designing this system because we have been very conscious over what people think is a greater risk."

She added that the system has capped the payment amount to £10,000, while banks are also stepping up procedures to help combat fraud.

© Independent Television News Limited 2008. All rights reserved.

Banking Headlines News - InsuranceHeadlines.com