The importance of contingency planning in payment processing

Contingency planning is essential for every business.  Also referred to as business continuity planning, it ensures you’re prepared for unexpected events that could cause operational problems for your business, or even disable it completely.

 

It involves thinking ahead and figuring out what could go wrong, how likely it is to happen, and how to deal with it if it does happen. Good planning and testing will minimize the negative effects of unexpected events and make sure your business can keep running smoothly.

 

 

Contingency planning for payment processing

 

While contingency planning covers all areas of a business, it’s arguably particularly critical for payment processing and managing cashflow.

 

What would happen if you suddenly lost the ability to process your Bacs debit or credit payments?

 

This could happen for various reasons but the fallout of derailed payment processing would be the same – disgruntled customers, suppliers and employees. Losing access to your Bacs processing software can lead to compromised data security too.  Not to mention the time, effort and cost of getting everything back on track.

 

 

Whatever your Bacs process, you need a Plan B

 

There are many ways to process and submit your Bacs files, whether that’s via your bank or by using a Bacs-approve software.  Either way, you need to have a Plan B if for any reason you’re unable to submit payment files to Bacs.

 

While banks have their own contingency plans, it’s important for businesses to have their own plans in place to ensure continuity of their operations. This is because a service disruption can affect other aspects of the business beyond payment processing. For example, if payments cannot be processed, it may result in inventory or supply chain disruptions, customer dissatisfaction and even reputational damage.

 

It’s essential to keep your bank updated with accurate and up-to-date information about your Security Contact to ensure a prompt response in case of any security incidents.

 

The Security Contact is the person or team responsible for managing security-related matters. If the contact information is incorrect or outdated, this can lead to delays in resolving the issue, and potentially put your business at risk.

 

Safety in the cloud

Generally speaking, cloud-based business systems take away the hassle of running and managing software solutions, so a cloud-based Bacs solution is a sensible choice.  They usually provide high availability rates with low downtime, although these will vary from one provider to another.

 

But be cautious, even cloud-based services are not 100% risk-free.  Using a cloud solution doesn’t mean you don’t need a contingency plan, after all you still need to connect to it via your internet connection.

 

Beware of smartcards

There are other aspects of your Bacs procedures that have inherent risks too.  In fact, your process itself might still be at risk if it relies on outdated technology, for example if you’re using smartcards.  These carry a range of risks, from cards being lost, people with the card being unexpectedly absent, or card failure because the required smartcard software has not been updated.

 

This single element of your approval and signing process has multiple points of possible failure and would be enough to crash your Bacs processing.

 

 

Who else is at risk?

 

Contingency planning for your Bacs processing is particularly critical if you’re using an on-premise service.

 

An on-premise service failure can cause a chain of significant negative impacts on your business. These can range from loss of revenue and decreased productivity to data breaches if hacked leading to potential regulatory or legal breaches.

 

Are you offering Bureau services to other business units or organisations?  Then the impact of a failure in your ability to process Bacs payments will have even wider repercussions and potentially cause reputational damage.

 

It’s also important to remember that maintaining your Bacs Approved Bureau (BAB) status requires you to have robust business continuity plans in place.

 

 

Three key benefits of robust contingency planning

 

  1. Minimise financial losses by helping you to identifying alternative payment methods or backup systems that can be used to ensure that payments can be processed or received.
  2. Lessen risk by removing reliance on smartcards or on-premise solutions.
  3. Minimise downtime and maintain continuity of operations in the event of a disruption.

 

The benefits of contingency planning are numerous, and businesses that invest in developing and implementing a contingency plan are better positioned to navigate unexpected events and continue to operate effectively.

 

 

5 key steps for an effective contingency plan

 

Step 1. Identify key payment processes that are most critical to your business and prioritise them in the contingency plan. This could include collecting recurring payments, signing up direct debit payment customers, making payroll payments on time and paying suppliers.

 

Step 2. Assess potential risks that could impact payment processes such as system failures or cyber-attacks. Evaluate the likelihood and potential impact of each risk.

 

Step 3. Develop backup plans such as alternative payment methods or contingency systems that can be used in the event of a disruption. Ensure that backup plans are feasible and effective.

 

Step 4. Develop a communication plan to ensure that customers, suppliers and employees are aware of any potential payment disruptions and understand how to make or receive payments using alternative methods.

 

Step 5. Test the plan regularly to ensure that it is – and remains – effective and up-to-date.

 

 

Keep your contingency planning in sync with your business

 

Businesses change over time, employees leave and new ones join.  New business tools get added and they way your business functions can change too.

 

So it’s important to review a contingency plan regularly to ensure it stays fit-for-purpose, up-to-date and effective. As your business evolves over time, adjustments may need to be made and a review ensures your plan reflects any changes in your business or your procedures.

 

By reviewing the contingency plan regularly, you can be sure that:

 

  • Your business is protected against new risks and threats

 

  • The information in the plan is accurate and up-to-date

 

  • You’ve identified any gaps or weaknesses in the plan before it’s too late

 

  • Your business remains compliant with current laws or regulations

 

A contingency plan is not something to do once and then forget.  It deserves care and regular attention if it’s to serve you well when you need it most.

 

 

Is it time to review your Bacs contingency plan?

 

At paygate, we assist businesses of all types in safeguarding their Bacs payment operations. Contact us for impartial advice on evaluating and enhancing your business continuity plan.

 

 

 

Need to review your payment processes? We’re here to help.

More from our knowledge hub

paygate v3 features & benefits

Single sign-on *Coming in 2024 for V3

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Security policy manager * Includes: password complexity manager, inactive timeout, time restrictions, IP address restrictions
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AWS ISO27001 hosted * Primary fail over and back up UK data centres
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SFTP file uploads/downloads *Secure way to move files across the internet, customers can use their own certificates
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Gemalto security tokens MFA✓✓✓
Email MFA  ✓
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APP MFA *
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Works on Android or iOS.
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In a blacklist you add various sortcodes / account numbers and the system will prevent any payment to those accounts.
In a whitelist you add sortcodes and account numbers and the system will ONLY allow payments to accounts on the whitelist.
We include various tools to help build and maintain the lists.
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GDPR subject access request *
Search tools to help perform a GDRP lookup.
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GDPR Data cleansing *Remove historical data by bulk or individual.
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Browser compatbility *
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Built for performance *
Version 3 runs on super modern, high-end infrastructure
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Single Platform *
Customers have a single user account that they can use across all services (Enterprise, Online, Validate, etc).
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Agent rebuilt key management system *
Very secure way to get files to and from the Paygate cloud.
Supports ways to automate files being sent into the paygate cloud and retrieving reports from the cloud.
Key management was rebuilt for V3 to further increase security.
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HTTPS uploads/downloads *

paygate v3 supports both SFTP and HTTPS.
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In browser File and Folder handling *
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Logging tickets by email ✓ ✓ ✓
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Auto File Import *Automatically imports a payment file and validates it. Users no longer need to manually browse for and import a file, paygate will do this in the background and present the validation results to the user.
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Designer in browser * In V2 Workflows use an older style desktop app. In V3 workflows are built and managed in the Paygate Browser app. It’s much easier to deploy and manage.
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Improved logging * A feature mainly for PS/CS to help them diagnose problems with workflows. Problems can be diagnosed and fixed faster.
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New scheduler triggers * A new trigger type that allows the user to set up a workflow like you set up a meeting in Outlook. For some, this is more flexible and easier to understand than using CRON.
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Triggers for multiple workflows * You can use a single trigger to start multiple workflows. It’s a simple feature that will make things easier to manage if you have a lot of workflows.
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Workflow validation * Troubleshoots new workflows, validation
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Workflow chaining * Allows a workflow to call another workflow. Using this you can simplify large complicated workflows in smaller separate ones. Easier to manage and diagnose issues.
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New nodes * Various new nodes that help to build new types of workflows or help manage existing workflows.
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Full documentation V3 will be fully documented with help guides and tutorials.
and tutorials *
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Multiple filename variables * Supporting multiple filename variables should make designing complex workflows a bit easier.
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Future developments * Pure Excel Importer – XLSX; BACS Calendar Widget; Workflow Timeline; Workflow / Mobile App notification / management; S3 Connector
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Download and distribute A Reports * When you have workflow and HSM you can automate the entire BACS report download process. They can automatically be converted to other formats for integration into finance apps. They can be emailed to customers as html, pdf or zips. They can be made available for collection via SFTP. Or, if you use Agent, they can be security delivered to the customer’s private network.
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Partial submission ✓ ✓ ✓
Lightsout submission * No signing
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Batched bureau submissions ✓ ✓ ✓
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Submission Re-entry * Complete your submissions over any amount of time
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Familiar workflow throughout *It will be familiar to V2 customer but they will notice improvements.
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Revamped manual submission mode *This is completely new in V3 Bureau. Those customers wanting a more manual way of building their submission (Rather than using Jobs) will find a new, efficient way of working.
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Drag and drop files from anywhere *Like in other areas of V3. User can just drag and drop file in Bureau for processing. They can also use the Restricted File Browser and Server file browser – that add more security – if they wish.
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Support for multiple file formats per submission * No longer limited to single Standard 18 submission for example
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Better default filename support *Makes working with files easier.
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Usage Reporting over data range *Small but useful improvement to reporting. User can set a date range on the usage report.
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Validate *Validate is integrated in V3 and so customers that have both products can access them from the same client with the same account.
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API Access *Validate API and the Payment API.
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Customisable dashboard *Many useful, module specific, dashboard widgets, e.g. Payments, collections, workflow, etc.
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Enhanced reporting including real-time usage ✓

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