Efficient payroll processing is a cornerstone of any successful business or organisation. Two essential methods for facilitating payroll are Bacs and Faster payments. These electronic payment systems offer distinct advantages, allowing businesses to pay their staff promptly and securely.
In this blog, we will explore Bacs and Faster payments, looking closely at their features, benefits and considerations when using them for payroll.
If you have a question about using Bacs for payroll, we’d love to hear from you. Click the button below to reach out.
Bacs is widely used in the UK for making regular, scheduled payments, including employee salaries. Bacs payments are processed in bulk and settled on specific dates.
Bacs payments are known for their reliability and security. Payments are processed through a regulated and well-established network, reducing the risk of errors or delays. Bacs payments are cost-effective, making them an attractive option for businesses of all sizes. Processing fees are typically lower than alternative methods. Straightforward to set up and manage, employers can schedule payments in advance, streamlining the payroll process.
While Bacs is a dependable choice for payroll, it’s essential to consider the lead time required for payments. Bacs payments can take up to three business days to clear, so you need to plan accordingly to ensure employees receive their salaries on time.
Faster payments is another electronic payment system used for payroll processing in the UK. This method offers quicker transaction processing compared to Bacs. Payments made through Faster payments are usually processed within hours or even minutes.
Faster payments allow for near-instantaneous payroll processing. This speed can be especially useful when you need to pay employees quickly. Unlike Bacs, Faster payments do not rely on batch processing and can be initiated at any time, including weekends and holidays. Employees appreciate receiving their salaries promptly and can improve employee satisfaction by ensuring they have access to their funds when they need them.
While Faster payments offer speed and flexibility, they may come with slightly higher transaction fees compared to Bacs. Additionally, Faster payments are typically used for one-time payments rather than recurring payroll, so they may be better suited for occasional or ad-hoc payments.
The choice between Bacs and Faster payments for payroll depends on your specific needs and circumstances. Some factors to consider:
• Payment frequency: If you have regular monthly or weekly payroll, Bacs may be the more efficient choice. For occasional or urgent payments, Faster payments could be the way to go.
• Timing: Bacs payments typically take three business days to clear. This means that if you initiate a payment on a Monday, it will usually reach the recipient’s account by Wednesday. Payments made through the Faster payments system are typically processed within a few hours, often within minutes. This speed makes Faster payments suitable for urgent or time-sensitive transactions. One significant advantage of Faster payments is that they operate 24/7, including weekends and holidays. This means you can initiate and receive Faster payments at any time, which is not the case with Bacs, which operates on business days.
• Cost: Compare the transaction fees associated with both methods to determine which is more cost-effective for your organization.
• Employee expectations: Compare the transaction fees associated with both methods to determine which is more cost-effective for your organization.
• Integration capability: Check whether your payroll software or service provider supports both Bacs and Faster payments to ensure seamless processing.
Both Bacs and Faster payments offer valuable solutions for processing payroll, each with its own set of advantages.
Bacs payments are known for their reliability but come with a longer processing time, typically taking up to three business days to clear. On the other hand, Faster payments offer speed and flexibility, with payments often processing within hours or even minutes, making them an excellent choice for urgent or immediate transactions. The choice between Bacs and Faster payments should be based on your specific needs and the timing requirements of your payments.
By understanding the features, benefits and considerations of these payment methods, you can choose the one that best aligns with your payroll processing needs and objectives. Whether you opt for the reliability of Bacs or the speed of Faster payments, your payroll process is sure to benefit from one of these payment methods.
Whether you’re just exploring or ready to start using Bacs, we’d love to hear from you. Fill in our Let’s Talk form to contact us for a quote, advice or a demo.
If you’d like to discuss your business requirements and how paygate can help, get in touch.
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Both schemes eliminate the need for manual payment processes by enabling electronic, automated payroll submissions. Bacs is ideal for scheduled, bulk salary runs, while Faster Payments handles urgent or ad-hoc payments near-instantly. Together, they give payroll teams the flexibility to manage both routine and time-sensitive payments efficiently.
Bacs is cost-effective, reliable, and well-suited to high-volume, recurring payroll. It supports bulk payment processing, integrates with payroll software, and operates through a regulated, established network — reducing the risk of errors or delays. Processing fees are typically lower than alternative methods, making it an efficient choice for weekly or monthly salary runs.
If using a bureau service, the bureau handles submission approvals, and you typically do not need your own SUN.
Faster Payments is the better option when speed is a priority. Unlike Bacs, which takes up to three business days to clear, Faster Payments typically processes within minutes and operates 24/7, including weekends and bank holidays. It’s best suited to urgent, one-off, or ad-hoc payments where employees need same-day access to funds.
Payroll teams can schedule Bacs submissions in advance, ensuring payments are initiated with enough lead time to clear within the three-day processing window. Bacs payment software allows teams to build and manage payment runs, set processing dates, and automate recurring submissions — reducing manual effort and the risk of missed payroll deadlines.
Bacs payment platforms offer workflow automation tools that handle file creation, validation, scheduling, and submission without manual intervention. Automated Bacs report retrieval ensures payroll teams can quickly identify and resolve any failed or returned payments. Integration with payroll, HR, or finance systems further streamlines the end-to-end process, reducing administrative overhead and improving accuracy.
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Security policy manager * Includes: password complexity manager, inactive timeout, time restrictions, IP address restrictions | ✓ | ✓ | ✓ |
AWS ISO27001 hosted * Primary fail over and back up UK data centres | ✓ | ✓ | |
SFTP file uploads/downloads *Secure way to move files across the internet, customers can use their own certificates | ✓ | ✓ | ✓ |
| Gemalto security tokens MFA | ✓ | ✓ | ✓ |
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| SMS MFA | ✓ | ✓ | ✓ |
APP MFA * Works with common auth apps such as Google Authenticator, Authy. Works on Android or iOS. | ✓ | ||
| PG Platform ISO27001 | ✓ | ||
Fraud tool *Currently support Blacklists and Whitelists. 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. | ✓ | ||
GDPR subject access request * Search tools to help perform a GDRP lookup. Then can optionally ‘sanitise’ personal data from the system. | ✓ | ✓ | ✓ |
GDPR Data cleansing *Remove historical data by bulk or individual. | ✓ | ||
Browser compatbility * We maintain support for Chrome, Edge and Firefox. | ✓ | ||
Built for performance * Version 3 runs on super modern, high-end infrastructure | ✓ | ||
Single Platform * Customers have a single user account that they can use across all services (Enterprise, Online, Validate, etc). | ✓ | ||
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. | ✓ | ||
HTTPS uploads/downloads * paygate v3 supports both SFTP and HTTPS. | ✓ | ||
In browser File and Folder handling * Allows customers to securely organise their files and folders that are stored on paygate | ✓ |
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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.
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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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Lightsout submission * No signing |
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| Batched bureau submissions | ✓ | ✓ | ✓ |
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| Customer import | ✓ | ✓ | ✓ |
| Bacs reporting tools | ✓ | ✓ | ✓ |
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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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Save Submissions *Save an ‘in-progress’ submission and return to it later. Build up a submission during the day |
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| Improved payment and submission searching | ✓ | ||
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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 | ✓ |
