Bacs payments rank among the most common methods for sending and receiving money across the UK. In this guide, we’ll provide an overview of what Bacs entails, how the payment process works, and how long transactions typically take.

What is a Bacs Payment?

Bacs, short for Bankers’ Automated Clearing Services, is an electronic payment system that enables direct bank-to-bank transactions. It is widely used in the UK for:

• Direct Debit payments – Businesses collect payments from customers on a scheduled basis, ideal for subscription services, utility bills, and memberships.

• Direct Credit payments – Businesses use this to pay salaries, supplier invoices, refunds, and more.

By eliminating the need for paper checks and manual bank transfers, Bacs payments help businesses operate more smoothly, reducing administrative tasks and improving cash flow.

How Bacs Payments Work

Bacs payments follow a structured process, typically taking three working days to complete:

1. Day 1: The business submits the Bacs payment instructions to their bank.

2. Day 2: The payment undergoes processing through the Bacs system.

3. Day 3: The funds are credited to the recipient’s bank account.

This predictable timeline makes Bacs payments an excellent choice for businesses looking to manage regular payments efficiently.

Key Questions About Bacs Payments

1. What Does Bacs Stand For?

Bacs stands for Bankers’ Automated Clearing Services. Established in 1968, it has been a trusted financial infrastructure for over 50 years, processing billions of transactions annually.

2. Which Banks Support Bacs?

Most major UK banks support Bacs payments, including:

• Allied Irish Bank

• Atom bank

• Bank of England

• Bank of Scotland PLC

• Barclays Bank PLC

• Barclays Bank UK PLC

• Citibank NA

• ClearBank®

• Clydesdale Bank PLC

• Starling Bank

• The Access Bank UK

• The Co-operative Bank

• The Royal Bank of Scotland

• TSB

• Turkish Bank UK

• Virgin Money

• Coutts & Co

• HSBC Bank PLC

• HSBC UK Bank PLC

• Lloyds Bank PLC

• Metro Bank

• Modulr

• Nationwide Building Society

• NatWest

• Northern Bank

• PayrNet

• Santander

A full list of participating banks can be found on the official Bacs website or through your bank’s customer service.

3. How Long Does a Bacs Payment Take?

Bacs payments take three working days to process. This timeframe makes them more predictable than some alternatives, such as Faster Payments, which are immediate but often have lower transaction limits.

4. How to Make a Bacs Payment

Businesses can initiate Bacs payments in two ways:

• Via online banking – Many banks offer Bacs payment options through their business banking portals.

• Through Bacs-approved software – Businesses processing high volumes of transactions often use payroll and accounting software that integrates with Bacs, such as Xero, QuickBooks, FreshBooks and Stripe.

  
  

5. How Much Does a Bacs Payment Cost?

Bacs payments are one of the most cost-effective payment methods in the UK. The exact cost varies depending on your bank and volume of transactions, but it is significantly cheaper than CHAPS payments, which can cost upwards of £20 per transaction.

6. Is Bacs the Same as a Bank Transfer?

Not all bank transfers are Bacs payments. The UK has multiple bank transfer systems, including:

• Faster Payments – Immediate transfers, often used for small transactions.

• CHAPS (Clearing House Automated Payment System) – High-value transactions, usually completed the same day.

• Bacs Payments – Cost-effective, reliable, and best for scheduled or bulk transactions.

  
  

Benefits of Using Bacs Payments

Businesses using Bacs payments gain several advantages, including:

Lower Transaction Costs – Cheaper than checks, CHAPS, and other manual payment methods.

Predictability & Security – Fixed three-day processing ensures financial stability and planning.

Automation Capabilities – Easily set up recurring payments for salaries, suppliers, and subscriptions.

Reduced Administrative Burden – Less paperwork and manual processing mean more efficiency.

Integration with Accounting Software – Supports seamless bookkeeping with platforms like Xero, QuickBooks, and FreshBooks.

For UK businesses, Bacs remains a preferred choice for handling large volumes of transactions with ease and affordability.

Why Choose Falcos for Bacs Payments?

Managing Bacs payments manually can be time-consuming, but with Falcos, businesses can automate the process for greater efficiency and accuracy. Falcos natively integrates with Bacs, ensuring seamless financial operations. Here’s why businesses trust Falcos:

1. Effortless Integration

Falcos works seamlessly with Xero, HubSpot, FreshBooks, QuickBooks, and other financial platforms, enabling a smooth data flow between sales and finance teams.

2. Boosted Efficiency

By automating Bacs payments, businesses can eliminate manual errors, reduce processing time, and improve overall financial accuracy.

3. Cost-Effective Transactions

With native Bacs processing, businesses can cut down on transaction fees and allocate savings towards growth and expansion.

4. Enhanced Financial Productivity

Falcos enables real-time financial data synchronization, making it easier to track invoices, payments, and cash flow in one centralised platform.

5. Ideal for UK SaaS & Professional Service Businesses

For companies operating in the SaaS, consultancy, and service sectors, Falcos simplifies financial workflows, ensuring smoother transactions between clients, suppliers, and employees.

How to Get Started with Bacs Payments Through Falcos

Setting up Bacs payments with Falcos is quick and hassle-free:

Create an account – Sign up on the Falcos platform.

Connect your Stripe Account – Securely link your business Stripe account.

Automate payments – Schedule and track Bacs payments effortlessly.

Sync with accounting software – Integrate with Xero, QuickBooks, or other platforms for a unified financial system and streamlined invoicing process.

By using Falcos for Bacs payments, businesses can enjoy faster, more reliable, and cost-efficient financial transactions.

Final Thoughts

Bacs payments remain a pillar of the UK’s financial system, offering secure, cost-effective, and automated payment processing for businesses. Whether you're handling payroll, supplier invoices, or direct debit collections, Bacs payments provide a reliable solution.

With Falcos, businesses can fully automate Bacs transactions, reducing manual work, improving cash flow management, and integrating seamlessly with existing finance tools.

Take your financial operations to the next level.

Learn more about how Falcos can simplify Bacs payments at falcos.co.uk.