Everything you need to know about Bacs payments and Faster Payments

Bacs and Faster Payments are both means to send payments from one bank account to another, also known as bank transfer. Bacs is cheaper than Faster Payments, but takes three days longer to send. We put together a guide to highlight the differences of both bank payment types.

  1. What is a Bacs payment?
  2. What is Faster Payments?
  3. How long does a Bacs payment take?
  4. How long do Faster Payments take?
  5. Faster payments cut off times
  6. What are typical Bacs payment charges?
  7. Faster Payments charges

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 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 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.

  • Day one: File input
  • Day Two: Recipient bank receives file delivery
  • Day Three: Payment settlement (debit and credits)

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.

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:

  • Bacs File charges
  • Charges on rejected Bacs files (up to 100 pounds)
  • File re-input or amendments (up to 300 pounds)
  • File reversal (up to 2,000 pounds)
  • Smart Cards

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).

  • Banks charge typically between 1-5 pounds per payment plus payment file charges similar to Bacs
  • Bacs approved bureau: Some offer next day payments similar to Faster payments for 50p to 1 pound
  • Telleroo: Standard 45p per real-time faster payment, discounts available on volume

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.

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