How Much Does A Bacs Payment Cost?

One of the most common bank to bank payments in the UK is the Bacs system. Bacs payments are split into two different methods: Direct Debit and Direct Credit. Direct Debits occur when one party draws money on a set date from a payee’s account. Direct Credits involve one party depositing money in another’s bank account. 

Bacs stands for Bankers’ Automated Payment System. Bacs are so synonymous with secure payments that Bacs Direct Credit is used to pay eight in ten employees in the UK in the form of wages, salaries or benefits. 

Not only reserved for wage payment, 90% of the UK population pay at least one regular bill by Direct Debit. This flexible payment system enables people to stay on top of their finances and delivers access to a number of different payments, such as one-off, subscription or irregular payments. 

What Is A Bacs Payment System?

In brief, a Bacs payment system is an electronic funds transfer mechanism that is used for direct payments between UK bank accounts. This is operated by Pay.uk and has processed over 160 million transactions between its 1968 inception and the present day. 

Bacs payments typically take three working days to clear for use in an account. More specifically, there are usually three days between a Bacs submission and clearance in the recipient’s account. In order to facilitate secure payments, the system uses advanced encryption technology and monitoring to provide reliable electronic payment transactions. 

To begin using a Bacs payment system, organisations need to seek and complete approval. This will lead to the provision of a SUN (Service User Number) for the organisation from Bacs so that they can access Direct Debit or Direct Credit payments. 

Read what to do if you don't have a Bacs service user number in our blog.

Can You Recall A Bacs Payment?

As expected with financial transactions, there are time limits on any updates or changes to Bacs payments. To recall a Bacs payment, you must contact your PSP (payment service provider) or bank before 3pm on processing day. To clarify, processing day is the day before the payment will be credited to the payee’s account, otherwise known as entry day. After 3pm on processing day, it’s unlikely that a payment will be able to be recalled. 

So, if entry day is a Friday, then a Bacs payment can be recalled by 3pm the day before, which would be a Thursday. After 3pm on that day, you wouldn’t be able to recall this payment as it would have already been processed to clear and credit the recipient account the next day. 

Receiving Proof Of A Bacs Payment

There is no one official piece of formal proof of a Bacs payment. However, companies and individuals can validate and monitor Bacs payments using a number of different methods:

• - When a Bacs payment instruction is submitted, there will generally be a payment confirmation reference number supplied by your bank. 
• - Bank statements typically show Bacs payments leaving or arriving into your account. Details such as date, amount and a payment reference will be advised. 
• - Recipients’ accounts will show the credited amount from a Bacs transaction in three working days from submission. 
• - When recurring Bacs Direct Debit payments are organised, the recipient should have advanced notification of this process.
• - While there is no ‘one’ piece of proof of a Bacs payment, there is a combination of records that provide evidence of transactions that have taken place. 
•  

How Much Does A Bacs Payment Cost?

Compared to other payment systems, Bacs are cost-efficient for businesses. Collecting and sending Bacs payments are both simple and cheaper than many other methods. You can either set up Direct Debits directly with your bank or engage a Bacs-approved bureau. Setting up Bacs-approved software can also streamline your operations. 

For businesses transferring money between UK banks, a Bacs payment typically costs from 5p-50p per transaction. Banks may charge additional fees to the transaction fee so it’s a good idea to research and check all fees which help your business to plan effectively. 

Pay.uk levies a registration application fee of £4,500 and a sliding scale of payments for transaction payment levels. To set up with a Bacs approved bureau, there will be a fee individual to that company, so it makes sense to request information about a bureau’s fees when you start to work with them. 

Why Choose Interbacs For Bacs Payments?

Not only are we a Bacs Affiliate, which means we are one of very few specialist Bacs-approved solution suppliers, but we also maintain rigorously high standards as a Bacs approved bureau. 

If you’re looking for more information about the right payment solution to suit your business, then visit our solution finder. In just a few minutes, you’ll discover a tailored payment solution that could transform your payment operations and deliver efficiencies that benefit your business.