Database problems at the Bacs clearing system have left up to 400,000 people awaiting their salary payments.
The problem, which slowed the IP-based Bacstel communications channel, was discovered when batch processing which should have been completed on Wednesday afternoon (28 March) failed to clear. Payments due today (30 March) will not now clear until Monday.
Bacs provides a central clearing house for automated payments and clears 30m a day. It is one of the largest automated payment systems in the world, processing more than 20m salaries a month, 70% of UK household bills and the majority of state benefits and pension payments. In Europe it process over 15% of all European automated payments.
The UK payments association Apacs, which oversees the Bacs system, said there had only been one significant problem with Bacs before, in 1997. “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,” Apacs said.
Voca, which operates the Bacs system, last year completed the transfer of its core systems to an IP-based system – Bacstel – which it said brought “improved security, faster payment confirmation, reduced processing costs and the ability to track the status of payments online”.
But Apacs said the stalled salary payments were held up when a technical problem with a database caused the Bacstel-IP channel to run slowly. “This issue meant that a number of submitters had difficulty in completing their submissions.”
The payment platform was now back to normal, Apacs said. High-value payments made under the Chaps system, cheque and card transactions were not affected.
The Bacstel payment engine uses Oracle 10g database and the BEA Weblogic 8.1 application server running on a cluster of clusters of Sun Fire 25000 Ultrasparc servers. The system was built in Java by an in house team supported by software developers from Perot systems.
Earlier this month Voca and Link, the banking network operator, announced plans to merge, creating Europe’s largest processor of direct debit and credit transactions.
Gareth Lodge, European banking and payments analyst at Tower Group said: "There have been many incidents over the years with payments being submitted late, and history shows there is little impact even in the short term. However, the press release from Apacs implies a system error. If this is the case, it is significant. The system itself has never failed in 35 years - the only previous outage was as a result of BT failing and not Bacs."
He added that Voca had just just spent around £100m upgrading its systemsin a bid to sell its services in Europe, but a failure of the system that processes £30bn transactions a day could have "catastrophic effects" with huge implications for the economy.
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