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Everything you need to know about Bacs payments and Faster Payments

June 19, 2020
Table of Contents

What is a Bacs payment?

A Bacs payment is a bank transfer from one bank account to another bank account, taking three business days to arrive. However, a Bacs payment can also be a Direct Debit, which is the opposite of a bank transfer - meaning a business pulls money out of a bank account with relevant permission of the other party. Bacs payments are not same-day payments or instant, but it is still the number one bank payment type businesses use in the UK.

What does Bacs stand for?

Bacs stands for Bankers Automated Clearing Services, and is the standard payment type in the commercial world. A bacs can be a direct debit or direct credit.

How long does a Bacs payment take?

A Bacs payment takes three days to arrive, and is only sending on business days. The Bacs cycle starts with a file submission, which has to be submitted up until a certain cut-off time and gets sent on the third business day.

A Bacs transfer also known as Bacs direct credit normally arrives very early in the morning on the third day, usually by about 7am. Beware, only Monday to Friday, even though it is a electronic payment system it takes non-working days off.

Do I need to be a Bacs bureau to make Bacs payments?

No, you can make Bacs payments from your bank account as long as your bank offers this service. If you are an accountant or business, Bacs bureaus allow you to directly submit payment files to third party software providers. If you want to find out more about why you might want to use a Bacs bureau, see our blog post dedicated to this here.

Can Bacs payments go in any time of day?

Bacs payments go in starting 1am to 7am for the vast majority of banks. If a bacs payment hasn't been credited after 7am, very likely you would need to wait until the next working day.

Is Bacs the same as bank transfer?

Yes, Bacs is a bank transfer. There are three types of bank transfers in the UK, Bacs, CHAPS, and Faster Payments. Only Bacs as opposed to the other types can also be a direct debit payment.

What is Faster Payments?

Faster Payments is an electronic payment system to send bank payments in seconds instead of three working days. This is the standard way for consumers to send money, however, for businesses Bacs payments is still the primary option as it has been the standard every finance person has been used to for decades. That is one reason Telleroo started to support Bacs files to send Faster Payments.

How long do Faster Payments take?

Faster Payments only take seconds to send. The payment will arrive within a minute and is immediately visible in the recipients' bank account which means you will have instant business payments, unless the sending or receiving bank has limited access to Faster Payments which may cause delays. The system runs 24/7 including public holidays and weekends. This can be especially helpful when you run on a weekly payroll schedule.

Faster payments cut off times

The Faster Payments system itself runs round the clock, however, your bank might have cut-off times as early as 5:30pm. Which means if you want to send a payment at 6pm it does not go through until the next morning. Telleroo though does not have any cut-off times which allows you to send money anytime of the day, no matter if it is a weekend or the middle of the night - it will always go through straight away.

What are typical Bacs payment charges?

A Bacs payment is the cheapest way to send payments. It only costs a few pennies, mostly depending on the volume and the bank, or Bacs bureau. When sending say 1,000 plus payments monthly this should be less than 10p, also watch out for hidden bank charges such as:

Faster payment charges

Faster Payments is one of the most expensive option to send bank payments, which will often be 1 to 5 pounds per payment. However, because of new entrants such as Telleroo and others banks won’t get away with this anymore. Currently they are trying to either have you use Bacs or very expensive CHAPS (10 pounds plus, also known as same-day payment).

We at Telleroo are committed to end this era of slow and expensive business payments to eventually level the playing field, and make business payments as effortless as consumer payments.

Telleroo is authorised by the Financial Conduct Authority (FCA) by agency of Moorwand Ltd under the Electronic Money Regulations 2011, Firm Reference 902767, for the issuing of electronic money. We hold all corresponding funds in a safeguarded account at ClearBank Ltd.
Telleroo: 0203 6334 810
86-90 Paul Street London,EC2A 4NE