Digital banking and its impact on the payroll sector
Digital banking continues its disruption of outdated payroll industry practices, with the latest example being BrightPay’s partnership with fintech company, Modulr, providing their customers with a direct payment service.
While the payroll industry has been slow to create and adopt solutions to innovate and automate workflows, there has been a marked uptake in digital solutions in recent years, unexpectedly accelerated by the COVID-19 pandemic. Modern businesses expect convenience, scalability, and reliability when managing their payments, and payroll software companies have risen to meet their demands.
By utilising these new banking processes, you and your clients can access a deepening banking infrastructure that is instant, easy to use, and secure. Rather than using the traditional Bacs payment services, you can use Faster Payments Service to send money in real-time between bank accounts.
How else is digital banking affecting the payroll sector?
1. A shift from Bacs
The use of Bacs as the primary payment method will continue to decline. A reluctance to switch from using Bacs as a payment method is however to be expected; it has been used to clear and settle automated payments in the UK since 1968. We know it to be reliable and safe. Large banks are relying on customers’ inertia for staying with this traditional process.
However, the benefits of Faster Payments will be hard to resist for many businesses. Saving time with an automated workflow and the ability to make real-time payments will meet consumers’ expectations of the ‘instant economy’ we live in.
2. New revenue stream for accountants
Digital banking introduces a new opportunity for accountants and bureaus – the ability to offer clients a seamless payroll workflow. This service can be included in your service offering, giving you the opportunity to increase your revenue while keeping your overheads down.
In the case of the BrightPay and Modulr partnership, you can complete the payment process in minutes while requiring little input from your clients. How does it work? Clients receive their own Modulr payment account. When payroll is finalised, you initiate the payment from within BrightPay. The client simply approves the amount, transfers the funds to their account and employees are then paid in minutes. You can learn more about this service here.
3. Saves time and maximises efficiency
The adoption of Faster Payments Service will save accountants and any Bacs user a considerable amount of time. Bacs depends on manual intervention and involves numerous steps. With Faster Payments, there is no more need for manual exports or file uploads to banks. This reduces the chance of errors and the subsequent time spent fixing them. This also represents another digital solution automating payroll tasks and freeing up time that can be spent on more profitable services.
4. Offers greater flexibility
A digital payments infrastructure offers bureaus greater payroll flexibility, reducing unnecessary stress. Instead of rushing to meet banks’ cut-off time for payments, a payments platform like Modulr allows you to make payments any time, even on weekends or bank holidays. With Modulr, payments are processed in under 90 seconds. This will especially impact clients who pay weekly wages, who have a shorter timeframe to collect and finalise timesheets before sending payment through to the bank.
Interested in learning more?
Join the BrightPay and Modulr teams for this free webinar where we explore what you need to know about our new Direct Payments functionality. Plus, we demonstrate how quick and seamless the process is in both BrightPay and Modulr: https://t.co/al2AmK2HK9#payroll #fasterpayments pic.twitter.com/Z2mbCQswJU
— BrightPay UK (@BrightPayUK) May 14, 2021