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Bacs partners with BT for faster connection to payment network

Nick Huber
Clearing house Bacs has partnered with BT to offer customers faster, more reliable connections to its IP-based payment network.

Two new services - delivered over an extranet or a DSL broadband line - will give Bacs' 50,000 corporate customers faster payments and a guarantee of 99.5% connection levels, according to Bacs and BT.

Under existing links to the Bacs IP network - over the internet or through a dial-up modem - companies may face delays in sending payments to Bacs due to problems in connecting to the internet.

The new twin-line extranet connection service, managed on behalf of the user by BT and Bacs, costs £25,000 a year, plus a one-off installation cost of £23,000.

The DSL connection service, which is about four times faster than ISDN, costs £3,000 a year plus an additional charge of £3,000 in the first year.

Bacs is currently migrating 50,000 corporate customers onto its IP network. Users have until the end of 2005 to upgrade their Bacs connection software before the old network is switched off.

Bacs customers will also have to ensure that their payroll suppliers have updated their software to ensure payroll details can be transferred in a suitable format to Bacs' IP network.

The tie-up with BT is part of a long-term strategy by Bacs to broaden its technology services.

Earlier this year, Bacs announced a joint venture with a US software company to provide an online bill presentation and payment service for UK banks.

Mark Blowers, senior research analyst at Butler Group, said the move to an IP network would improve service for Bacs customers and provide new commercial opportunities for the clearing house.

"One of the benefits of moving to an IP network is that you can improve connectivity and provide new services," he said. "It also helps customers use broadband and move-away from dial-up access."

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