Faster Payments in payroll – it’s about time!

Zellis is working with Mastercard, Income Group and Starling Bank to bring the power of real-time payroll payments to large UK businesses.

In an exclusive webinar, some of the UK’s leading experts on the power and potential of real-time payments offered an exclusive overview of one of the most exciting trends in modernising payroll processes.

Zellis brought together Gregor Dobbie, CEO of Vocalink (a Mastercard company), Ian Wheeler, CEO and Founder of Income Group, and Angela Clow, one of its own payroll experts to explain how real-time payments was developed, how it’s being implemented and the potential for UK businesses.

Gregor Dobbie was the first to present. In the opening section (which begins at 2:00 in the recording), Gregor explained how Vocalink is the technology provider behind some of the UK’s most critical payment services, including batch-clearing through Bacs, ATM Link, and – of course – real-time Faster Payments.

“The UK, believe it or not, is one of – if not THE most – innovative countries in the world in the field of payments,” he began.

The UK started innovating with faster, real-time payments fourteen years ago, and Gregor’s role has included helping the rest of the world follow the UK’s lead in offering consumers and businesses choice in how they transact.

He cited the incredible growth in UK demand for real-time payments (Pay.uk data showing a 27% YoY increase in May), being driven by expectations from both consumers and businesses. Despite fourteen years of availability, however, most of the use of Faster Payments has – to date – been for person-to-person transfers. However, he cites an explosion of new business use cases in the past few years.

The gig economy is one example, where highly variable payments and the cash-flow pressures on the businesses hiring gig workers make the appeal of real-time and accurate payroll more attractive. The other use case was variable bill payments, where direct debit (delivered by Bacs) was ‘locking’ users into fixed payments that didn’t match their usage month-to-month. Finally, the pandemic has driven a major increase in more digital transactions, and fewer cash transactions.

But these consumer benefits are just as appealing to corporate business. “Cash is king. There are many opportunities around effective management of reconciliation treasury functions: e-invoicing, payroll, billing – all where real-time payments makes it easier,” Gregor concluded.

The next speaker was Ian Wheeler, CEO and Founder of Income Group, who explained (beginning at 10:00 in the recording) how his company is working with its partners Mastercard and Zellis to bring the benefits of Faster Payments (branded product) to the payroll cycle.  

Ian explained some of the drivers of adoption for businesses in embracing Faster Payments. “It’s not acceptable anymore for it to take three days for money to move to an employee – that’s causing a lot of businesses to look at bringing it into their cycle,” he explained. Additionally, addressing and fixing common payroll processing errors through existing Bacs processes was not only costly, but an increasingly unnecessary burden, given the new solutions available.  

He raised the example of one large employer who faced serious challenges because they were consistently under-paying employees. “Not because of [a lack of] accuracy, not because of [a lack of] information, but simply because of the lack of time.” He explained that having to make two payments for multiple workers each pay run was causing a major drag on payroll – as issue that could be managed far easier with the extra time granted by real-time payment capability.  

He explained that Faster Payments was more evolution than revolution in the way businesses process payroll: “At one time we were paid by cash, then we would have been paid by cheque, then we were paying electronically by Bacs – the next stage of evolution is Faster Payments.”  

To complete the webinar, Angela Clow, one of Zellis’ payroll experts, provided a demonstration of how real-time Faster Payments can be seamlessly incorporated into existing processes, and the key role it plays in Zellis’ Agile Payroll proposition (commencing at 17:55 in the webinar recording).

Angela explained that Agile Payroll was introduced as part of Zellis HCM Cloud, our next generation cloud solution. The powerful payroll automation tools included in Zellis HCM Cloud, including ResourceLink, already significantly improve accurately and compliance. With Faster Payments, these advantages are pressed even further – and all can be accessed through Zellis’ intuitive, user-friendly interface.

Bringing up an illustration of the conventional payroll cycle, Angela showed how Faster Payments offers an alternative to conventional Bacs processing in the ‘termination’ stage. As an alternative to Bacs, Faster Payments seamlessly integrates into existing process, and has the potential to reclaim two to three days of the downtime which otherwise must be built in for Bacs transfers.

The webinar concluded with a live demonstration of the real-time payments dashboard (starting at 21:16 in the recording). From log-in, through the options for reviewing, approving and amending transactions, Zellis showed how easy it is for payroll teams to get up and running with Faster Payments. And there’s no doubt that for many of them, embracing this modern technology is long overdue.

Want to hear more? Catch the recording of our Faster Payments webinar here.