Help Centre Sending & receiving payments

What is a BACS payment?

In the financial sector, acronyms are everywhere. One of the most common is BACS: a popular UK payment service used by businesses and individuals for decades. But what are BACS payments, and how do they work? In this Help Centre article, we’ll answer all those questions and more.

What is BACS? 

A BACS payment is an electronic bank-to-bank transfer between two bank accounts. BACS payments can either be a Direct Debit or Direct Credit. They’re one of the most widespread forms of bank transfer within the UK and have existed for over 50 years.

What does BACS stand for?  

BACS stands for Bankers’ Automated Clearing System. BACS's payment services are managed and operated by the organisation Pay.UK is responsible for the smooth running of the UK’s retail payment systems. 


Are there different types of BACS payments?  

Yes – as mentioned above, there are two types of BACS payments, each with its own process. These are called Direct Credit and Direct Debit. 

Direct Credit

More commonly referred to as a ‘bank transfer’, Direct Credit is when one party deposits money into another bank account. BACS is very popular among companies paying salaries, with eight in ten employees in the UK receiving their wages through BACS. Here are a few examples of Direct Credit BACS payments: 

  • Expenses 

  • Salary payments 

  • Refunds 

  • Insurance payments 

  • Dividends 

Direct Debit

In contrast to Direct Credit, Direct Debit BACS payments occur when one party provides permission to another party to remove money from a bank account. Below are some examples of Direct Debit BACS payments: 

  • Credit card bills 

  • Utility bills 

  • Rent payments 

  • Subscriptions 

  • Memberships 

How long do BACS payments take?

In both their Direct Credit and Direct Debit forms, BACS payments should never take longer than three working days to process.  

However, to ensure this three-day time frame, you must submit your transfer through BACS between 7am and 10:30pm on weekdays. If you’re transferring or receiving money through BACS Direct Credit, you can expect this to clear within 72hrs. 

How does BACS work?  

The BACS payment process is simple, reliable, and safe. Here’s a three-step breakdown of how BACS works: 

1. Your payment will be submitted to the BACS service. 

2. The relevant bank will begin processing your transfer. 

3. The money will be formally settled through either direct debit or credit.

Are BACS payments safe? 

As with most other official payment systems, BACS services are generally safe. For a BACS payment to be successful, senders must provide a recipient's name, sort code, and bank account number. While the process can be slow (up to three days), reliability is high. 

However, that doesn’t mean vigilance should be side-lined. You and your business should always be aware of the possibility of fraud with any local or international transfers. Scammers quickly seize upon complacency. 

What are the pros and cons of BACS payments? 

There is a multitude of benefits and drawbacks that come with using BACS payments. We’ve outlined some of the key ones below: 


  • Safe and reliable transfers. 

  • Cheap payment charges that add up to pennies for a single transfer. 

  • Direct Debit transfers are seamless with BACS. 


  • Slow processing times of up to three working days. 

  • BACS transfers only go through on business days. 

  • Strict cut-off times on working days (7am to 10:30pm). 

  • You must sign up for a Service User Number (SUN) to qualify for BACS. 

BACS payments: a summary  

BACS is one of the most popular methods to transfer money in the UK. Reliable and secure, BACS has allowed thousands of businesses to send and receive money smoothly and cost-efficiently. However, long processing times and needless barriers no longer meet consumer expectations in our globally connected, high-speed world. 
In the modern world, change happens quickly. Over the last decade, bank challengers like 3S Money have helped accelerate change within the financial sector. Our unique account and payment services offer faster transfers for your business - without sacrificing safety or reliability.  

Our multi-currency account has been built specifically for ambitious brands of all shapes and sizes looking to expand globally. We offer clients access to 65+ currencies, global account details, and access to payment networks in 190+ countries.

With 3S Money, there is no more extended waiting times and no more bureaucracy - just a payment system built on common sense. To discover how we can help support your business, check your eligibility and be pre-approved for an account in under 15 minutes.