Electronic payments service gives firms three months to switch over

About 35,000 employers risk missing a deadline for migrating to an alternative electronic payment system to Bacs.

The Bacs system is being upgraded to cope with increasing demand and will be turned off at the end of the year. However, a large number of employers look like missing the cut-off date for changing their payment.

Companies dragging their heels on the change-over will have to pay their contractors and staff by cheque or cash if they don’t move quickly to change their systems.

Voca (formerly Bacs), which runs the system, said the change was needed because of a massive growth in electronic transactions. There are currently 4.5 million transactions a year using Bacs, but this figure is expected to rise to six million within two years.

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Voca is trying to persuade all companies to adopt the new Bacstel-IP system, but so far only 75,000 of the 110,000 companies affected have moved over.

The deadline to migrate to the new system was set in 2002, but company apathy and resentment at being forced to move has been blamed for the delay by many businesses.