Bank of Scotland to join IPSO

BANK OF SCOTLAND is to join the Irish interbank clearing system next week.

The Irish Payments Services Organisation (IPSO), the industry group that co-ordinates the system for managing payments between banks, said the bank’s application for admission had been accepted and would take effect from next Monday.

Access to the clearing system will allow the bank to offer business and personal customers the ability to make interbank payments on the same terms as customers of other clearing banks. The move will result in the bank offering direct debits, cheque books, standing orders and other money transmission services in its own right. It had previously relied on other banks to act on its behalf on an agency basis.

But its new services will be limited to electronic payments for a number of weeks as it will not become a full member of the paper-based aspect of the clearing system, which governs cheques and credit transfers, until early November.

Joining the clearing system is a key plank in the company’s swoop on the Irish market, which will see it open its first high street branches here before the end of the year. Bank of Scotland (Ireland) chief executive Mark Duffy has promised to shake up the market with a range of new product offerings and has regularly criticised his rivals for their treatment of customers.

The bank had delayed making an application for full membership until the introduction of new rules earlier this year to make it easier for customers to switch between banks. The so-called “switching code” made banks responsible for dealing with the burden of paperwork involved in moving from one bank to another.

The bank will become the seventh member of the retail clearing system.

Gaining full access to the clearing system is seen as a considerable statement of intent. Many banks, especially smaller or niche operators, have been content to piggy-back off an existing full member rather than incur the extra costs involved in seeking membership in their own right.