What is a BACS Payment?

What is a BACS?

A BACS payment is a type of transfer in the UK from one bank to another. However, as you’ll soon see, not all bank transfers are automatically BACS payments.

What does BACS stand for?

BACS stands for Bankers Automated Clearing Services, a network of banks the system was originally built on. However, it has since become a subsidiary of Pay.UK.

Why use BACS?

BACS payments provide a safe, cost-effective way to make and receive payments.

What are the benefits of BACS payments?

BACS payments were first introduced back in 1968 as a way to streamline payments, so it’s an established, tried-and-tested system. Now, there are billions of BACS payments in the UK each year.

BACS Direct Debit

You'll probably be familiar with Direct Debits. They give a third party permission to take a payment from your account, usually on a regular basis.

BACS Direct Credit

Direct Credits are payments into your account from third parties.

Which banks use BACS?

Most major banks in the UK use BACS payment, including the likes of Barclays, HSBC, and Lloyds. You can find a complete list on the BACS website.

ANNA supports BACS credits but not BACS payments - to find out more, check out our guide to which payment types we accept. 

What is a BACS Service User Number?

A BACS service user number (SUN) is a 6-digit identifier for BACS payments. 

How to set up a BACS transaction 

By default, banks may use a different type of payment when you want to make a money transfer, such as Faster Transfers. To make a BACS transaction as a business, you may need an SUN. 

You can either apply for one through your bank/business account and then sign up for BACS, or use a BACS Approved Bureau — a third-party software — to obtain a SUN and make the payment. Note that applying for a BACS through your bank can take a long time.

You may also be able to make a BACS payment without a SUN by using your bank’s services.

How to get paid by Direct Credit

To get paid by direct credit, you’ll generally need to provide:

• Your full name 
• Your address
• Your bank’s name
• Your account number
• Your sort code

Then, the payer will set up the transfer. In this case, you don’t need an SUN.

How long does a BACS payment take?

It generally takes 3 working days for a BACS payment to clear.

Advantages and disadvantages of BACS payments

Not sure whether BACS payments are the right choice for you? Let’s look at the pros and cons.

Advantages 

• Cheaper than most alternatives 
• Safe
• Reliable 

Disadvantages

• Payments aren’t instant 
• Payments only run on weekdays 
• Expensive and lengthy application

How much does a BACS transfer cost?

The exact cost of  BACS transfer varies between providers, but it’s generally a matter of pennies. Meanwhile, it’s usually free to receive a BACS transfer.

However, signing up for BACS with a bank may involve a setup fee.

Alternatives to BACS payment services

The main alternatives to BACS payments are CHAPS payments and Faster Payments. 

As the name suggests, Faster Payments are quicker than BACS transfers, and they generally arrive in an account almost immediately. You can only make Faster Payments online.

CHAPS payments are payments that arrive on the same day you send them (as long as you set up the payment between Monday to Friday before 9pm). This makes them a faster option, and you can make them either online in branch or by phone.

FAQs

Can BACS payments go in at any time of day?

The BACS system runs between 7am-10.30pm on weekdays, and doesn’t operate on weekends. Payments are only transferred within this timeframe.

What is the maximum amount you can pay using BACS?

You can send up to £20 million per transaction through BACS, but some banks impose their own limits.

Can BACS be used for international payments?

The BACS system is designed for UK institutions. However, there may be workarounds that allow you to make international payments through an intermediary.

Are BACS payments the same as Faster Payments?

No. Faster Payments are a type of online payment that usually arrives in an account immediately after initiating the transaction, while BACS payments take three business days to process.

Is BACS the same as a bank transfer?

A BACS is a type of bank transfer. There are other types too, such as Faster Payments and CHAPS payments.

What is the difference between BACS and bank transfer?

A BACS payment is just one type of bank transfer, although the two terms are sometimes used interchangeably. Other types of bank transfers have different speeds and processes.

Can a BACS payment be recalled?

There are some cases in which a BACS payment can be recalled, such as a fraud or a mistake. However, there’s no guarantee this will be possible.