A software-related business continuity problem which arose on Wednesday has caused major difficulties across the UK electronic payments network. The BACS system has a major back-log of payment requests, with the result that many business-to-business transactions have not been made on time and many employees will not receive scheduled salary payments.

The Association of Payment Clearing Systems, which is responsible for BACS issued the following statement concerning the incident:

"BANKING INDUSTRY ADMIT PROBLEMS WITH PROCESSING OF SALARY PAYMENTS

We are aware of a problem with the processing of a number of salary payments. This will unfortunately mean that up to 400,000 customers will not receive their monthly salary as expected. This represents about 1.6% of the total payments which will be processed through BACS.

The entire banking and payments industry is extremely sorry that this has happened and we are working to resolve the issue and limit the impact on individual customers.

All banks are aware of what has happened and are working together with those corporate customers who have been unable to pay their employees to ensure that those payments are made at the next available date. We are confident that all affected individuals will have received their normal salary payment by Monday 2 April 2007 .

Unfortunately some personal customers may experience problems, for example, withdrawing funds from their current account, depending on their personal circumstances.

Our clear advice to customers is that if they have any concerns, they should contact their own bank immediately. Our clear priority is to ensure that customers are not out-of-pocket and that any customers affected will not miss any payments being made (like monthly mortgage payments) or suffer any charges for being overdrawn, where this has been caused by the missed salary payment.

•Date: 30th March 2007 • Region: UK •Type: Article •Topic: Financial sector
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