Bacs Payment Services

Introduced in 1998, Bacs processing (Bankers automated clearing services) is the system used in the UK to electronically process payments between bank accounts.

Bacs processing works through typically a three-day cycle:

• Day One: A business submits a Bacs payment file through a Bacs approved software, a Bacs approved bureau, or a bank portal. This file typically contains the naems, sort codes and account numbers to be credited and debited, the payment date and the amount. Files must be sent to Bacs by 22.30 

• Day Two: Bacs undertakes relevant checks, processes the file and it is forwarded to the recipient’s bank. From here, the recipient’s bank will begin to process the payment. 

• Day Three: Payments are debited from the sender’s account and credited to the recipient’s account simultaneously.

There are a number of benefits associated with Bacs processing, continuing on from the benefits mentioned above. 

• Cost efficient: Bacs payments have lower processing fees than other payment methods, making them highly cost-effective for bulk payments.
• Reliable and secure: Bacs has been processing payments for over 55 years and in that time has established a strong reputation for security and reliability. Almost 5 billion transactions are processed by each year any problems that arise are flagged and quickly resolved.
• Automated and efficient: The Bacs process can be fully automated, with payments scheduled in advance if required and reconciliation by exception, reducing the administration associated with manual processing.

For more information from Bacs on how to make payments see their little-bacs-book.pdf

Yes, Bacs payments are very secure. This is due to the process being encrypted and validated, plus you have a full audit history. This significantly reduces the chance of fraud or regulatory issues. To find out more, please view our certifications here.

There are two types of Bacs payments, namely Bacs direct credits and Direct Debits. Both work over the same 3-day processing cycle.

• Direct Debits again are cheaper than alternative regular payment methods to collect funds
• Cleared funds into your account on a known date helps with cash flow forecasting
• Direct Debits can be scheduled in advance with reconciliation by exception, reducing the overall cost of collection
• They are simple to set up – online, over the phone or on paper – and 85% of UK consumers prefer to pay regular bills by Direct Debit

For more information from Bacs about collecting by Direct Debit see their  little_bacs_guide_to_direct_debit-v2.pdf

The process to become a Bacs service user is documented here and is as follows:

• Contact your Payment Service Provider (normally your organisation’s bank or building society) who you will need to ‘sponsor’ you onto the service. They will provide you with access to the scheme rules and a service user number (SUN) if appropriate
• Consider whether you want to process your own payments and collections via hosted SaaS or outsource it via a Bacs approved bureau such as Parseq

A Bacs approved bureau such as Parseq can be a more cost effective way to make Bacs payments, especially for lower volumes of transactions. It can also be a quicker and simpler option as processes and security procedures are already in place, and staff are fully trained to ensure timely and accurate payments.