In a two-year roll-out, Capita will centralise its internal payment processing across 200 UKlocations and move to the Bacstel-IP network.
The new network will handle transactions for Capita, whose customers include the Criminal Records Bureau, the BBC (TV licence service) and Transport for London, (congestion charge).
Bacs is currently migrating 50,000 corporate customers onto its IP-based network. Users have until the end of 2005 to upgrade their Bacs connection software before the old private network is switched off.
Benefits of the network for customers will include faster payment confirmation and the ability to track the progress of payments online, rather than having to wait for receipts for confirmation, according to Bacs.
Capita will use Bottomline Technologies' Webseries software to link all of its payments systems.
By linking its payment systems, Capita can install the new network centrally rather than at each site.
"Bottomline's Webseries will allow Capita to unify its entire existing payments infrastructure and maximise the benefits of migration to Bacstel-IP," said Ian Gates, group IT director at Capita.
"By standardising on Webseries, we also have the option of extending its use to handle cheque processing, Chaps and Swift payments."
In addition to rolling out a new network to its customers, Bacs is broadening its technology services. Last month it announced a joint venture with a US software company to provide an online bill presentation and payment service for UK banks.
Bacs and CheckFree, a specialist in electronic billing whose products are used by more than 1,100 financial services companies, will allow consumers to view and pay bills from their bank's website.