"It's late September and I really should be back at school."

These are timeless words sung by Rod Stewart in Maggie Mae during my college days. I just heard it on the radio again today. Never have I wanted those lyrics to be more true as I do this year … to return to the days of youth, innocence and a world less complex than today.

There is another reason that song resonates with me currently. In graduate school at The University of Chicago, I lived in a facility called International House. It was my first real exposure to people from other countries and of different cultures. I now work daily with colleagues from all over the world, learning about their cultures. Perhaps you work with people from other countries, too. Or at the very least, your company may do business internationally. As you may know, this can complicate the ways you develop products or deliver services.

One of my best friends from grad school was a charming fellow from Great Britain. As the world's attention focused on England and London this summer, I thought about my friend and his family. From the euphoria of London winning its bid to host the Olympics one day to the tragedy of the multiple bombings less than 24 hours later, our hearts went out to British citizens.

Now, what does this preamble have to do with transaction processing? In this month's column, I want to return to the themes from previous issues of TPAtlanta where I traced some of the early developments of the transaction processing industry in Georgia.

For this issue, I want to expand on the theme on a more global scale, taking a look at the transaction processing industry in England. So how are things with our British counterparts in the transaction processing industry?

Somewhat surprising to me, the answer is "not too well," at least not by current U.S. standards! Believe it or not, customer credit for a deposit made at a U.K. bank does not always occur on the same day. Sometimes it takes several days for funds to be transferred between accounts within the same bank or even longer for payments to post in the U.K. Contrast that time frame with the fact that I mailed a check to the Red Cross on the Wednesday after Hurricane Katrina hit and it cleared my bank that Friday, resulting in barely 48 hours of combined mail and check processing time.

Fortunately, banking officials in the U.K. are gradually trying to bring their Transaction Processing industry into the 21st Century, albeit at a very slow pace.

The Association for Payment Clearing Services (APACS), the U.K. payments industry trade association has formed an implementation group to determine how to better process payments and other financial transactions. APACS currently has 31 members, including the high street banks, major global banks, building societies, credit card issuers, the Royal Mail Group and the Bank of England.

With their first report of this activity due out in Oct. 2005, agreement to reduce clearing times on electronic payments between banks following telephone or internet instructions from customers, as well as standing orders, have already been reached, according to the Payment Systems Task Force, which is chaired by the British Office of Fair Trading.

The new clearing service will provide same day or next day clearing depending on the time of day the payment is initiated. However, these new services and their associated technologies and business processes are not expected to be in place until 2007.

The banking industry in the U.K. has been closely involved with this task force and has played a major role leading to this positive decision. On the heels of this recent announcement, APACS will now lead the complex challenge to deliver the central system for this service within two and a half years. Or that is currently their stated goal.

The first task of the implementation group, which is to be completed in late 2005, is to decide and agree upon the technological platform. The key challenge for this first phase is to ensure the technology is suitably robust, secure and efficient with the capacity to meet longer-term requirements. Also, it will be necessary to seek agreement with the participating banks, which inevitably will need to undertake significant work to make their own systems compatible.

Paul Smee, APACS Chief Executive, said, "This is a positive move. The driver behind changes in payments should be customer-led. Despite the fact that research tells us that for the majority of customers in the majority of situations speed is less important than cost, certainty and security, the advent of the Internet has brought with it a growing expectation that online payments should move speedily, at the touch of a button. This new service will not only impact Internet payments but also phone and standing order payments. These together accounted for seven percent of all automated payments last year. While this figure is low, in a few years' time as online banking continues to grow, customers will want to make more of these payments. So, the timing for this massive change and investment is just right."

He continued, "The Task Force has worked extremely effectively bringing together diverse interests for the benefit of consumers - we look forward to the continuing challenge of delivering real change to customers. The U.K. will have a faster payment service to rival the best in the world with the resilience and reach that are key to payments and in an environment where U.K. customers enjoy free banking if their accounts stay in credit."

Jonathan May, the Director of Markets and Policy Initiatives for the UK Office of Fair Trading and the Chairman of the task force said, "This is good news for bank customers, both personal and business. Telephone and Internet payments and standing orders should all be speeded up and the money could be available to the recipient on the same day."

"I am very pleased with the way the banking industry, the consumer and business organizations, HM Treasury and the Bank of England and the OFT have all been able to work together to secure this important change. It proves that the Task Force approach can work effectively to deal with longstanding concerns. There is a further agenda for it to tackle," May added.

So, as you go about doing your part for the Transaction Processing industry each day, keep in mind that it often takes both the combined efforts of many people and a long time to bring about true change in our business.

What is your company doing locally or in the international realm? We at TPAtlanta invite you to write us about the activities that you are involved with so that we can track and share the progress being made in the Transaction Processing industry.

Thank you!
Calvin D. Johnson, Publisher
publisher@tpatlanta.com
Trans Atlantic Systems, Inc.