BACS Payment

What is a BACS payment?

A BACS payment is a type of bank transfer in the UK that sends money from one bank account to another. BACS stands for Bankers’ Automated Clearing Services, which has been around since the 1960s. It’s used by businesses to pay employees, vendors, and suppliers and by individuals to pay regular bills like rent or utility bills. Unlike instant payments, BACS payments are processed in batches, which keeps costs down but takes a little longer to clear.

Key Points

BACS means Bankers’ Automated Clearing Services and is a UK payment method to transfer funds between bank accounts, especially for payroll, vendor payments, and regular bills.
BACS payments take 3 working days to clear. Day one is submission, day two is bank processing, and day three is funds clearing—excluding weekends and bank holidays.
BACS is one of the types of bank transfers in the UK, along with Faster Payments and CHAPS. BACS is for bulk or scheduled payments not instant or high-value same-day transfers.

How long does a BACS payment take?

BACS payments take 3 working days to clear.

Day one is submission. The payment is initiated and sent to the bank.
Day two is bank processing. The bank reviews and prepares the payment for settlement.
Day three is funds clearing. The money arrives in the recipient’s account.

Remember, weekends and bank holidays don’t count as working days, so payments made on a Friday might not clear until the following Tuesday.

Is BACS the same as a bank transfer?

BACS is a type of bank transfer, but not all bank transfers are BACS payments. In the UK, there are several ways to move money between accounts—BACS, Faster Payments, and CHAPS are the most common. BACS is for scheduled or bulk payments, Faster Payments are instant, and CHAPS is for high-value same-day transfers.

How to make a BACS payment

To make a BACS payment you’ll typically need to set it up through your bank or accounting software. You’ll need the recipient’s sort code, account number, and payment reference. Businesses submit BACS files through a BACS-approved software provider or bank portal. Once submitted, the payment goes through the 3-day BACS cycle. Individuals can also make BACS payments through online banking, but in most cases, your bank will default to a Faster Payment unless you’re setting up a larger or recurring payment. BACS payments can only be made within the UK. Both the sender and recipient must have UK bank accounts that support BACS. This system is part of the UK banking infrastructure and does not support international transfers.