BACS threat to business

As many as 13,000 affected businesses may have to pick up a bill running into millions of pounds because they have ignored warnings that the existing BACS payment system will be turned off at the end of the year, writes Damian Wild.

Every company using BACS must migrate to the new BACSTEL-IP platform at the end of the year. The new internet-based platform has been designed to improve the security, reliability and speed of payments.

With 40,000 companies using BACS software directly, the industry is warning that 35% have yet to migrate.

Any company failing to switch faces three choices: paying employees and suppliers by cheque, which can run to three times the cost of a BACS transfer; using an external payroll bureau, which can double the cost of a direct transaction; or by making payments in cash, which presents an enormous security risk.

Adrian Stafford-Jones, managing director of Albany Software, said that hidden costs would push the bill into thousands of pounds for smaller organisations and to tens of thousands for larger ones.