Money will be able to travel between accounts on the same day, it has been announced.
The Association of Payments and Clearing Services (APACS) has revealed new proposals which mean money transferred to another account over the phone or online will arrive within hours.
The new system will also include standing orders but will not be in place until 2007.
"Back in May we pledged to speed up internet and telephone payments but the UK banking industry has now decided to go a giant stride beyond this to give customers a service whose speed and convenience is world class," said Paul Smee, APACS chief executive.
"Our new system will enable customers to use the internet or phone to make a payment that will reach the recipient's bank account within a few hours," he added.
APACS says the service will be available all day, every day and will be particularly useful in the payment of bills.To read more about Banking News, click here.
© Adfero Ltd