What is BACS Payment
BACS or Bankers Automated Clearing Services is a UK based scheme for the electronic processing of payments or financial transactions. BACS is owned by 15 of the leading banks and building societies in the UK and the BACS system provides two principal e-payment schemes. These are direct debit and BACS direct credit.
BACS can be setup in many ways depending on a business’s needs. Larger businesses may need to make a large number of transfers each day. BACS can be setup to accommodate this and process financial transactions in an accurate and timely manner.
Benefits of BACS
- Saves time & administrative costs
- Improves cashflow management
- Increases payment safety
- Improves payment terms
- Direct cost savings
The BACS system also has several drawbacks. For example it takes 3 days for a transfer to go through. Consumer groups have heavily criticised this as similar setups in other countries allow for transfers to be made on the same day.
