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What are Bacs Payments?

Bacs (Bankers Automated Clearing Services) payments allow businesses to send and receive regular GBP payments automatically to and from other UK banks. Unlike Faster Payments and CHAPS, Bacs payments are mostly used for regular, non-urgent, low-value payments that do not require a same-day settlement.

Types of Bacs payments

Bacs payments are made up of two main payment types, Direct Debits and Direct Credits.

  • ‘Direct Debits’ are the simplest way for organisations to collect regular or occasional payments. A Direct Debit authorises an organisation to collect varying amounts from a customer’s account, as long as they’re given advance notice. Direct Debits are used for things like council tax payments, gym memberships, utility bills and online streaming subscriptions. 
  • ‘Direct Credits’ allow businesses to make payments directly into other bank or building society accounts. They’re quicker and cheaper than traditional methods. Direct Credits are commonly used for paying employees’ salaries and regular payments to suppliers.

Features and benefits of Bacs

  • A reliable, safe and secure way of handling regular payments.
  • Mostly used for regular, non-urgent, low-value payments that don’t need to be made that day.
  • Helps businesses better manage and control their cash flow.
  • Bacs payments have a three day working cycle, meaning that a payment made on a Monday would arrive in the recipient’s account on the Wednesday.

How to make a Bacs payment

Before you can make Bacs payments, please ask your branch for an application and sponsorship to the Bacs Scheme. This is also subject to our credit approval.

Once approved, you can submit Bacs payments (both credits and debits) in two ways:

  • The ‘Direct’ route requires investment in Bacs approved software. Your organisation manages all administration needed to generate and submit Bacs instructions. The direct route is generally suitable for large corporates with high payment volumes, that have the administrative capacity to manage the process on their own and a willingness to invest in Bacs approved software.
  • The ‘Indirect’ route is when your organisation employs a Bacs Approved Commercial Bureau to submit Bacs instructions on your behalf. This option is generally suitable for companies who have low collection volumes or don’t have the capacity to manage the collection process on their own. You can also submit Direct Credit instructions using online banking.

Need more information?

To learn more about Bacs payments, or to apply to use the Bacs Scheme, please contact your account manager.