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Last Updated: Friday, 30 March 2007, 14:40 GMT 15:40 UK
Banking hitch delays workers' pay
Customers inside bank
Customers are being advised to withdraw cash over the counter
Up to 400,000 people will not be paid as expected on Friday as a result of a problem with the banking system.

The Bacs system, an electronic means to process financial transactions, has been running slowly and so not all payments have been sent out in time.

Any worker affected by the problem should get their pay by Monday, industry association Apacs has said.

Banks are also trying to put in place a system to ensure direct debits go through as usual.

Such payments can be refused if it means people making the payments will go overdrawn.

Anger

One small business said it had not been reassured by what it had heard from its bank.

I wish the main banks would say we realise there is a problem and we will do the best to assist people
David Wood, small business manager

Workers at Studio Schemes, a radio post-production firm in Wellingborough, have not received their pay due on Friday.

Their boss David Wood has had to lend them some money to tide them over the weekend.

"They are very angry," Mr Wood said of his ten staff, several of whom have to pay bank loans and mortgages.

"Our bank says it might go in over the weekend but they are not quite sure."

Banks should be more upfront about the problem, he added.

"I wish the main banks would say we realise there is a problem and we will do the best to assist people but that doesn't happen."

Customer apology

The Association of Payment Clearing Services (Apacs) - an association of banks which handles credit transfers - said the delay had been caused by a software problem which had been discovered on Wednesday.

"We would like to stress to customers that we are doing all we can to resolve it and how sorry we are to people affected by this problem," said spokeswoman Sandra Quinn.

She stressed that by Thursday the payment system was operating normally again.

"This was just a one-off problem. We are pretty sure it is resolved. We are confident that payments that should have been made today will at the latest be in customers' accounts by Monday morning."

Apacs added that there was no pattern to the glitch and that any company that has been affected by the problem should be making their employees aware of it.

Anyone affected by the fault will be refunded charges should they go overdrawn or breach their overdraft limit as a result of the problem, the group added.

People who need cash for the weekend are being advised to withdraw it over the counter, as cash machines may refuse the withdrawal.

Bacs stands for Bankers Automated Clearing Services, although it shortened the name to Bacs after building societies joined the system.




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