Beginning in September, small charities will be able to switch their bank and building society accounts in a simpler and more reliable manner thanks to a new service.
Led by the Payments Council, a new, free-to-use Current Account Switch Service will make switching from one bank or building society to another simpler, reliable and hassle-free. Banks and building societies covering all of the competitive current account market will offer the new service.
Small charities with an annual income of less than £1 million, as well as small trusts with a net asset value of less than £1 million will be eligible to use the new service.
For charities, a key benefit of the new service is that the new bank will arrange for all exiting payments (those coming in, such as donations, as well as those going out, such as bill payments or wages) to be automatically transferred to the new account. This includes all regular donations made via standing order or Direct Debit.
A new central redirection service will ensure that any payments accidentally sent to the old account after the switch date will be redirected automatically to the new account for a period of 13 months. So, a charity will still receive a donation that anyone accidentally makes to their old account (perhaps because they still have the old account details). If the payment was made electronically (via a faster payment, direct debit or standing order), the donor will have the charity’s new details automatically updated by their bank. This will ensure that any subsequent donation goes straight to the charity’s new account rather than to the old one.
To increase simplicity further, the switching process will be managed in full by the new bank or building society, and there will be no need to talk to the old one. The old account will remain open, and can be used by the charity up until the switch date, at which point the old account is closed and the new account becomes active.
The switch time has also been decreased to just seven working days, rather than the average 18 to 30 days that it currently takes, and the switch takes place on a date that suits the customer. Charities using the new service will be able to choose the day they wish the switch to take place, allowing them the necessary time to obtain any required signatories.
Finally, switching current account will be backed by a guarantee. This guarantee will ensure customers receive a clear and consistent level of service, highlighting the benefits and confirming that the customer will be refunded any charges and interest in the event of a failure of the service.
The Payments Council is the body responsible for ensuring that payment services work for all those that use them in the UK. It is responsible for delivering the new Current Account Switch Service and has committed approximately £750 million of investment to deliver and raise awareness of the service.
Further details can be found on the Payments Council website (opens new window).