Some 33 bank and building society brands accounting for almost all current accounts, have signed up to the agreement which will cut the length of time it takes to move accounts from up to 30 working days to seven working days.
The Payments Council (PC) confirmed the launch date of September 16 for the streamlined switching service, which also means all outgoing and incoming payments will be moved over to a customer’s new current account.
Payments which are accidentally made to the old account will automatically be redirected to the new account for 13 months after the switch.
Consumers will be refunded interest and charges if anything goes wrong.
Adrian Kamellard, chief executive of the PC, said: “We look forward to a new era of account switching which will lead to greater choice for customers and wider competition.”
There have already been signs that banks are gearing up for the changes, although not all of the preparations may be welcomed by consumers.
Last week, Halifax put a new rule on a £100 cash incentive it offers to switch to it. Consumers now have to shut their previous current account down when they complete their switch to Halifax.
Before the new rule was introduced, customers only had to transfer their direct debits and incoming payments to receive the £100, but Halifax said it had introduced the new requirement “in readiness” for the new switching service.
The PC confirmed that the new switching guarantee does require closure of the old current account.