Businesses welcome Bacs review

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Businesses welcome Bacs review

Nick Huber
Proposals for a radical restructuring of bank clearing house Bacs have been welcomed by business.

Secret restructuring discussions by Bacs - revealed last week by Computer Weekly - could let non-banks become shareholders in the elite financial club.

The shake-up will allow IT suppliers to develop Web-based payment services in partnership with UK banks, analysts claim. Business groups believe the revamp will improve the quality and variety of payment services available to UK companies.

The discussions over restructuring within Bacs - part of a wider review within the payment industry - come at a sensitive time for banks, which have come under fire from government and business for failing to offer innovative payment services.

The Government is committed to introducing a payment regulator for banking services. The Office of Fair Trading will regulate debit card, cheque and other payment services.

Atul Hindocha, chief technology officer for the Institute of Directors, said, "If Bacs was run as an independent business that managed its own destiny, and treated banks as a natural player in its supply chain, it would provide a better level of service through increased investment."

Retail business groups agreed. "Current online payment services are being developed in isolation by credit card providers. A lack of interoperability is slowing down e-business. A Bacs solution, if interoperable, could win consumer confidence," said a spokesman for the British Retail Consortium.

The Bacs shake-up could also see payment clearing association Apacs take over the running of the direct debit scheme. The review has been prompted by the critical Cruickshank report into the banking industry. No decision has yet been taken on structural reform by Bacs.

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