What it is
Bacs is the UK's long-standing batch clearing system owned and operated by Pay.UK. It runs two main services: Bacs Direct Credit, for sending money out such as payroll or supplier payments, and Direct Debit, for collecting recurring payments from customers with their permission. Unlike Faster Payments it is not real time; it works in scheduled batches.
- Batch rail for Direct Credit and Direct Debit
- Operated by Pay.UK
- Not instant; settles on a fixed timetable
Where it is mainly used
Bacs is used across the United Kingdom for salaries, supplier payments, subscriptions, membership fees and utility-style billing. Direct Debit in particular is the standard UK method for recurring collection because customers expect it and it is backed by a guaranteed refund scheme.
- United Kingdom (GBP)
- Payroll, supplier payments, subscriptions
- Recurring billing where the customer mandates collection
How your customer pays at checkout
For Direct Debit, the customer sets up a mandate once, giving you permission to collect agreed amounts from their account on due dates. For one-off collection you would normally use a faster method. Bacs is therefore best thought of as a recurring-collection and pay-out tool rather than a quick checkout button.
- Customer authorises a Direct Debit mandate
- You collect on the schedule the mandate allows
- Better for recurring than one-off checkout
How merchants access Bacs
Merchants access Bacs through a bank or bureau, or through a payments provider that offers Direct Debit and Direct Credit as a service. You normally need a UK sort code and account or a provider that manages the submission on your behalf. Direct technical connection is possible but is built for high volume and is rarely the right route for a small or medium seller.
- Access via your bank, a bureau or a PSP
- Direct Debit needs a customer mandate
- A provider can manage submissions for you
Pricing and settlement
Bacs typically has low per-transaction costs compared with cards, but there may be set-up, bureau or monthly fees. Settlement follows a fixed timetable, so plan a few working days for collection and credit. Published pricing figures you see online are for initial screening only. Confirm the provider's official pricing page or obtain a written quote before you go live, because fees vary by volume and service model.
- Low variable cost versus cards
- Possible set-up, bureau or monthly fees
- Fixed settlement timetable, not instant
Public contact route
Bacs is operated by Pay.UK. Day-to-day support for users is handled through the Bacs Service Desk. Use the official Bacs site for guides and the service desk for operational questions.
- Official site: https://www.bacs.co.uk/About
- Operator: https://www.wearepay.uk/
- Bacs Service Desk: servicedesk@bacsservices.co.uk
Questions merchants ask
Is Bacs the same as Faster Payments?
No. Bacs is a batch system used mainly for Direct Debit and Direct Credit on a timetable, while Faster Payments is real time. They serve different needs: Bacs for recurring and bulk, Faster Payments for instant transfers.
Can I use Bacs for one-off online checkout?
It is not ideal for one-off checkout because of the batch timetable and mandate setup. For instant one-off collection, a pay-by-bank or card option is usually better; keep Bacs for recurring mandates.
Do I need a UK entity for Direct Debit?
You need a way to collect from UK accounts, usually through a sponsor bank or a provider that offers Direct Debit as a managed service. Many providers let non-UK businesses collect without opening their own sponsor relationship.
How long does settlement take?
Direct Debit collection and Direct Credit follow a fixed number of working days. Plan around three working days for a typical collection cycle rather than expecting same-day funds.
What does it cost?
Variable per-item cost is usually low, but setup, bureau and monthly fees may apply. Published figures are for initial screening only; confirm the provider's official pricing page or a written quote before you go live.
What happens if a Direct Debit fails?
You receive an automated advice such as an unpaid report. You can retry within the scheme rules, but build dunning and retry logic into your billing system to avoid lost revenue.