The UK Payments association Apacs has confirmed that 400,000 people whose salaries were held up after database problems at the Bacs clearing system have now been paid.

Bacs provides a central clearing house for automated payments and clears 30 million a day. It is one of the largest automated payment systems in the world, processing more than 20 million salaries a month, 70 percent of UK household bills and the majority of state benefits and pension payments. In Europe it process over 15 percent of all European automated payments.

Payments due to be made through the Bacs system on Friday were stalled when database problems slowed the IP-based Bacstel communications channel. The glitch was discovered when batch processing that should have been completed on 28 March failed to clear.

An Apacs spokesperson said: "As far as we're aware the payments have all gone through." The computer faults had been dealt with and were not expected to recur, he added.

Bacs has only hit serious problems once before, in 1997. But last week's problems hit the new Bacstel payments engine rolled out by operator Voca last year. Voca said the new IP-based system would provide "improved security, faster payment confirmation, reduced processing costs and the ability to track the status of payments online”.

Bacstel uses Oracle's 10g database and the BEA Weblogic 8.1 application server running on a cluster of clusters of Sun Fire 25000 Ultrasparc servers. The system was built in Java by an in-house team supported by software developers from Perot systems.

Voca is set to merge with cash machine operator Link to create Europe's largest processor of direct debit and credit card transactions.