Payments clearing house BACS is spending £22m to move its payments submission to an IP-based service.
The internet-based payment system is part of a £75m revamp called NewBACS, and includes Public Key Infrastructure (PKI) security.
Around 40,000 companies submit payment details directly to BACS, with another 60,000 submitting them indirectly.
NewBACS programme director Martin Wilson explained that the IP-based service will replace a telecoms-based service, where customers had to wait a day for paper confirmation to come through.
Users of the IP service, called BACSTEL-IP, will be able to get online reports the same day, and alter their contact details.
The service is due to be up and running next year, according to Wilson. "There is a migration plan over three years to allow companies to build it into their business plans," he said.
According to BACS research three-quarters of users will move over to the new system as soon as they can.
BACS has developed an approval system for suppliers developing software for the service.
Wilson explained that the effort required to integrate BACSTEL-IP with customers' existing accounting systems will vary. Customers will be contacted by BACS or their software provider about the upgrade.
The clearing house has developed a "generic security harness" which gives customers more freedom about the type of PKI they use.
"The most exciting bit from a technical point of view is that we are protecting this with PKI," said Wilson.
BACS has created a standard code of conduct and set of rules so that customers can use a variety of PKI systems to access the system.
"Each bank can use their PKI and, as long as they meet the standards that BACS has set, we no longer have to be restricted by which trust scheme they use," he said. "We've done a lot of work on interoperability so that it is vendor neutral."
By 2005 BACS plans to have a completely new electronic payments infrastructure in place.
Latest Tesla news: Tesla stock price tanks amid reports of 'widening probe' by SEC and claims the base Model 3 loses money
SEC 'probe' takes its toll on Tesla as new research suggests that Tesla loses $6,000 on every $35,000 Model 3
10nm Cannon Lake Core i3-8121U CPUs make a rare outing with Intel's NUC mini PC
'Notorious' Australian child hacker thought he had executed 'flawless' hack
The former employee says that Tesla fired him for bringing the accusations to management internally