When making bank transfers from the UK, there are many different methods you can use, whether...
Is Bacs the same as a bank transfer?
Is a Bacs payment the same as a bank transfer? Yes and no. It’s actually one of several bank transfer payment solutions. The others being CHAPS payments and Faster Payments. In this article, Interbacs explains the differences between these three main bank transfer solutions to give you a better idea of their features, benefits and when to use them.
The terms “Bacs payment” and “bank transfer” are often used interchangeably. Bacs has become synonymous with bank transfers due to its prominence in the bank-to-bank payments sector. Much like “Hoover” has become the catch-all term for vacuum cleaners. When, in fact, there are other options available. We’re going to explore the various bank transfer solutions in use today to demonstrate the options available to you.
Bank transfer solutions
The following bank transfer services are the main payment options for UK businesses at present. Each offers a slightly different service, distinguished ultimately by its speed and cost. Let’s take a closer look.
Payments made through the Bacs system are bank-to-bank transfers comprising either Direct Debits that take money from an account or Direct Credits that deposit money into an account (which isn’t strictly a “bank transfer” per se). Bacs is the most popular payment system in the UK, processing 100 million transactions daily. Bacs payments are an extremely cost-effective solution but take three business days to clear.
CHAPS payments are intended for same-day, high-value bank transfers of more than £10,000 pounds (with no upper limit) that are time-sensitive. CHAPS payments are the preferred bank transfer option for larger financial institutions or individuals wishing to make time-sensitive payments. Charges can be as much as £25-£35 pounds per transaction depending on the provider, which can be a stumbling block for smaller enterprises.
Faster Payments were introduced in 2008 to provide real-time bank transfers. Faster Payments often clear within minutes and can be made 24/7, including weekends and bank holidays (although cut-off times sometimes apply for corporate customers). Whilst free for consumers, business transactions can cost up to £2.50 with some providers. Not all UK banks and building societies make and receive Faster Payments either.
How long does a bank transfer take?
As we’ve outlined above, the length of time a bank transfer takes depends entirely on which payment service you use. If you need to make an immediate bank transfer, then Faster Payments offer the quickest service. For same-day payments of larger sums of money, CHAPS payments are often the best option. Both come at a higher price than Bacs payments, however, which are still the preferred service for many UK businesses.
Save time and money with reliable, professional, and innovative direct debit management solutions and Bacs solutions from Interbacs. For more information about any of our products or services, please contact on 08444 127 180.