What are the advantages and disadvantages of Bacs payments?

Sending money via Bacs payments has its advantages and disadvantages, but what are they exactly?

Advantages

• Bacs payments are the cheapest way to send payments
• Every payroll/accounting software supports Bacs files

Disadvantages

• Payments take three days to clear vs Faster Payments (which usually clear immediately)
• Bacs payments only clear on business days
• Strict cut-off times (e.g. Wednesday 3pm to have payments sent on Friday)

Alternatives to Bacs payments

Although cheap and widely accessible, Bacs payments aren't the only option available to businesses looking to make payments. For businesses looking to make payments quickly, bank-to-bank payments can also be made through Faster Payments. Faster Payments are payments that usually land in the recipient's bank account in a few minutes and can be up to the value of £250,000 pounds per transfer, which are cheaper than CHAPS. Most banks charge between £1-5 pounds per Faster Payment.

How to get started with bulk payments

Sending individual payments is simple, mostly free, and accessible to even very small businesses. When it comes to sending more than a handful of payments it becomes more difficult and you are left with three options:

• Upgrade regular Business Banking to Corporate Banking (eg. Barclays.Net alike)
• Outsource payment file submissions to payment bureaus
• Use new web based applications such as the Telleroo Platform

At Telleroo we're committed to ending this era of slow and expensive business payments and to level the playing field, making business payments as effortless as consumer payments. Sign up today to find out how we can help your business.