A new scheme promising faster bank transfers for telephone and internet transactions has gone live.

The £300m Faster Payments Service has been developed by 13 banks and will allow customers to make one-off payments of up to £10,000 that will leave the account and reach the destination account on the same day.

Previously such transactions have taken up to four working days, allowing the banks to make an estimated £30m interest in 2007 alone.

The 13 member banks will phase in the system gradually and the service will be extended to standing orders in June.