From frustration to flexibility: Switching Bacs providers is easier than you think

By facilitating high-volume routine payments, Bacs maintains a critical role with UK business entities and banks, processing nearly 5 million Direct Debits and nearly 2 million Direct Credits in 2023¹. Organisations that utilise the Bacs payment system appreciate the cost-effective service and predictable processing times. However, businesses can find themselves locked into a Bacs supplier relationship that provides minimum value but plenty of frustration and high costs.

Too often, these imperfect relationships remain in place because organisations fear the assumed downtime or disruption inflicted when transitioning to a new supplier. But in reality, with a little planning and thoughtful vendor selection, moving to a new Bacs product can be a simple process that delivers benefits that extend beyond costs.

Outdated, unresponsive, inefficient? Signs you’ve outgrown your Bacs provider

Imagine driving a car with an old engine—one that’s prone to breakdowns, consumes excessive fuel and struggles to reach efficient driving speeds. You’re often late to appointments, friends and business associates are frustrated with your lack of punctuality, and your vehicle maintenance costs leave you with little extra cash for other necessities.

Then imagine you’re offered a trade on a vehicle with a new engine—one built for reliability and responsiveness. You make the switch, and your life changes. You no longer have to worry about delays from breakdowns or slow speeds. With fewer funds dedicated to unexpected vehicle maintenance, your cash flow improves, allowing you to make necessary purchases.

It’s a similar situation when organisations remain in a Bacs supplier relationship where they experience unplanned outages or get hit with hidden costs. Perhaps downtime is common, delaying the arrival of payments and disrupting liquidity. Or maybe a new previously hidden fee emerges, narrowing your margins and impeding growth.

Like trading up to a car with a brand-new engine, transitioning to the right Bacs supplier can eliminate these issues, improving payments speed and reliability. Better yet, with a little planning most organisations can expect a seamless transition between Bacs products:

• First, evaluate your organisation’s payments requirements, considering critical factors such as transaction volumes, security needs, and current inefficiencies. Establishing this baseline will ensure you select a provider that aligns well with your operational goals.
• Second, determine a realistic timeline for the transition. The leading vendors can have you up and running on a new system in a few weeks, while maintaining functionality on your current system during the transition.
• Last, be sure to dedicate sufficient resources to the project. Assembling a cross-functional team of IT specialists, finance managers, and operational staff to weigh in on critical features and oversee the switch will make it possible to ensure the migration proceeds smoothly.

Finding the right fit: How to select a new Bacs provider

Vendor selection is the most important criteria when transitioning to a new Bacs software supplier. You need a partner who is dedicated to the success of your business as well as your payments processing. When evaluating a new Bacs partner, consider the following:

• Scalability and transparency: Ensure your new vendor is capable of processing large payments volumes and offers scalable solutions that can grow with your business without introducing excessive costs. Look for clear, transparent pricing to avoid hidden fees.
• Security and compliance: When evaluating suppliers, seek stringent security protocols, such as 2-factor authentication and Confirmation of Payee (CoP), but also flexibility to meet your specific needs. For example, if your organisation utilises tokenised customer data to protect information, look for a vendor that can support this level of security.
• Adaptability and flexibility: To ensure timely payments processing and the security of customer data, many organisations make continuous upgrades to their payments processing. Service providers will need the flexibility to adapt with your changes. Software-as-a-Service solutions, built with open APIs, enable rapid and simple integration of new products and tools.
• Reliability and uptime: When a Bacs supplier experiences a technical glitch, the result is often wide-scale payment failures and delays. Extended disruption while restoring payment productivity and clearing backlogs can severely disrupt cash flow, while also placing significant strain on internal IT teams and business operations already burdened by system failure. To avoid liquidity hiccups, be sure to seek a provider that has a lengthy history of 100% uptime.
• Compatible payment processing: Transitions go smoother when you can avoid large-scale changes. Look for suppliers with similar payment workflows, ensuring you can continue to process your payments according to your schedule.
• Domestically based teams: Working with UK-based support, project and product teams enhance communication, ensuring that product explanations, onboarding instructions and technical issues are understood clearly.
• Comprehensive accredited training: Having an experienced vendor training team on hand to support your transition is key to achieving your goals with minimal disruption. Look for vendors with programs that are accredited with the Bacs Training Accreditation Scheme (BTAS) to ensure up-to-date, comprehensive support.
• Backup processing: Seek a Bacs software provider that is also a Bacs-approved Bureau for added redundancy in processing. If your submission fails, the bureau may be able to submit the payment file on your behalf, ensuring payments and collections are not affected.

Switching to a new Bacs vendor can bring enhanced speed and reliability to your payments process, generating predictable cash flows that improve liquidity. If you’re ready to make the change, contact Finastra and let us help you transition with confidence.

¹“Bacs Payment System Statistics.” Pay.UK. Retrieved from https://www.wearepay.uk/what-we-do/payment-systems/bacs-payment-system/bacs-payment-system-statistics/. Jul. 2, 2025.