The system - to be introduced by the Association for Payment Clearing Services (APACS), should have been in place by November 2007. Instead, APACS announced that it won't have it ready until May 2008.

The delay will allow the banks a further six months of stacking up interest earned from their criminally slow movement of customers' cash between accounts.

Currently customers who transfer their money through internet or phone banking, or make standing order transfers, are forced to wait for three to five days for the payments to be processed.

During this time, the banks accrue interest on the money, despite the fact it has not yet arrived in their account. This 'floating' cash is estimated at £50m a year. (source: www.thisismoney.co.uk)

The banking industry's Payments Systems Task Force had committed to a November 2007 date to have a fast, same-day transfer system up and running.

Government trading watchdog the OFT (Office of Fair Trading) has made clear it's unhappiness at the delay.

In a statement issued Aug 14, the OFT said it was "disappointed" by the delay because faster funds transfers would help consumers manage their finances better, including making it easier to avoid unauthorised overdrafts.

APACS insists the delay is necessary for "further rigorous testing" of its new Faster Payments Service.

APACS, backed by a conglomerate of the 13 UK banks and building societies which handle 95% of all payments made in the UK, began work on the Faster Payments Service in May 2005.

It followed significant government pressure on the banks and unregulated bodies (BACS, CHAPS etc) handling electronic money transfers to speed up their act.

The Treasury worried that the unnecessary delays in the system - creating cash limbos that only benefited the banks - was hampering UK business in world markets.

In his 2005 Pre-Budget Report, then Chancellor Gordon Brown warned the banks: "The Government remains committed to legislating if there has not been a significant improvement."

APACS has, in its own words, made "massive investment in terms of both time and money" in building the new system, backed by the combined resources of Abbey, Alliance & Leicester, Barclays, Citibank, Co-operative Bank, HBOS, HSBC, Lloyds TSB, National Australia Group, Nationwide Building Society, Northern Bank, Northern Rock, and the Royal Bank of Scotland Group.

Despite this, it still couldn't hit its own two-and-half-year completion promise.

In the meantime, UK banking customers will have to continue to put up with bank transfers that take five days to move electronically between accounts - even within the same bank and BACs payments that take three days to move from one computer to another.