Everything you need to know about BACS and BACS payments

Adam Rozsa

What is a BACS payment? BACS - formerly known as Bankers’ Automated Clearing Services - is a popular way to send money and receive payments in the UK. BACS electronic payments work similarly to ACH transfers in the US - allowing individuals and businesses to transfer money directly into UK bank accounts.

This guide covers all you need to know about the BACS payment system, including how BACS direct debit payments work, and how to set up a BACS transfer yourself. We’ll also touch on how to send money overseas with Wise and save up to 6x. Plus, get GBP bank details for free and set up your own direct debits. More on that coming up later.

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What does BACS stand for in banking?

BACS stands for Bankers’ Automated Clearing Services - the UK equivalent to ACH. BACS is owned and operated by Pay.UK, which also provides other services like checking account switching and digital check processing¹.

Types of BACS payments

Direct Debit

BACS direct debit payments allow people and businesses to make one off and recurring payments automatically.

To set up a direct debit BACS payment the customer will authorize a payee to collect funds on a pre agreed schedule. The customer is notified in advance of the amount that will be debited, but does not need to take any action to process the transfer. That means this is a convenient payment method for utility bills, rent and other regular transfers. BACS direct debit payments are often described as pull payments as the collecting organization pulls funds from the customer’s bank account.

BACS direct debits are usually used for payments within the UK - SEPA direct debit payments are also available when making payments within Europe.

Direct Credit

In a BACS direct credit payment, a payer like a company, pension provider or government institution will deposit funds in a bank account directly. This is commonly used for payroll, government benefits and other similar regular transfers. Payments can be set up in advance before being processed by the banks and deposited into banks and building societies around the UK - making this a very convenient way to pay and get paid.

BACS direct credit payments are often called push payments, as the payer will push funds into the customer account automatically.

How to make a BACS Payment?

You’ll be able to set up a BACS direct debit by authorizing a collecting company or organization to pull funds from your account. How you set up your BACS payment will vary based on the organization involved, but the typical process is as follows:

  • Access a direct debit mandate online or in paper form
  • Enter your account details including sort code
  • Add the details of the organization you’re paying if they’re not already on the form
  • Confirm the date you want the payments to start - and when they’ll end
  • Check everything over and submit to your bank to activate

If you’re sending a payment to someone else using a BACS bank transfer you’ll need to have their bank account number and sort code, and full name. You’ll usually be able to set up your payment via your own bank’s online banking service.

How long does a BACS payment take?

BACS payments typically take up to 3 working days to arrive. However, in the case of direct credit payments, paying organisations can schedule transfers in advance which can mean that BACS transfers of salary and benefits are available immediately on the day they’re due without any additional wait time.


Send money overseas and save up to 6x with Wise

If you need to send fast international payments, you need Wise.

Set up your free Wise account online today, to start sending money overseas using the mid-market exchange rate and low, transparent fees. Wise processes payments through a network of local bank accounts - which means transfers cost less, and can arrive faster than payments made with your regular bank.

With a Wise account you’ll get local bank details for 10 currencies, including GBP. That means you can schedule your own direct debit transfers from your Wise GBP currency balance if you need to make regular payments.

See how much you can save with Wise when sending money to the UK:

The true cost of sending USD to GBP

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What are the fees for a BACS payment?

BACS transfers are among the cheapest ways to move money within the UK. If your bank charges a fee for BACS payments, it’s likely to be very low - a few pennies in most cases.

What’s the difference between BACS vs CHAPS?

CHAPS - Clearing House Automated Payment - payments are another option for transfers within the UK. CHAPS payments are typically faster than BACS transfers, arriving in just a couple of hours. Banks may charge more for a CHAPS payment compared to a BACS transfer, making this type of payment more popular when delivery time is more important than overall cost.

Frequently asked questions

Is BACS the same as bank transfer?

BACS payments are a type of bank transfer. The words bank transfer and BACS transfer tend to be used interchangeably, with BACS being the preferred type of bank transfers in many cases due to its low cost and convenience.

Is BACS UK only?

BACS transfers are only available within the UK, from one GBP account to another.


1] BACS website

All sources checked on 20 January 2022

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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