Types of transactions made on the Bacs Payment System
Direct Debit
Represents an occasional or regular payment instruction set up by the end user in advance, authorising an organisation to collect a pre-agreed amount of money from their account, on a prearranged date.
Consumers can initiate a Direct Debit by completing a Direct Debit Instruction, obtained from the Marchant or Biller (the organisation requiring payment), online, using a mobile device, or over the telephone. The organisation will then forward the consumers instruction to their Payment Service Provider (PSP). The instruction authorises the Marchant or Biller to collect the money from their customers account.
Direct Debit is the safest and most cost-effective method of getting paid or for paying regular or occasional commitments, such as utility and phone bills.
Bacs Direct Credit
This is a regular payment, normally B2C, that pays the beneficiary on a regular date (i.e. first of the month) and is mainly used for paying wages and salaries.
Payments can be sent Monday to Friday, excluding bank holidays. If the prearranged date falls on a weekend or bank holiday, the payment is made on the next working day.
It is not possible to guarantee the exact time the payment will reach the recipient’s account, although at least 90% of Direct Credit payments are credited to beneficiary account by 06:00am
Direct Credit is a cheap, simple, secure and reliable way to make and receive payments by electronic transfer, directly into another account.
Over 150,000 organisations use Bacs Direct Credit and while it is the preferred method for organisational payroll operations and other business-to-business transactions, it can also be used for a wide range of other applications, such as pensions, employee expenses, insurance settlements, dividends and refunds.