Bacs payments are an established and essential part of the UK’s financial fabric. Both consumers and organisations use Bacs payment systems because they are reliable, effective, secure and efficient.
There are two types of Bacs payments: Direct Debit and Direct Credit. Direct Debits are typically used by consumers to make regular payments, pay bills or buy goods and services. Direct Credits are generally used by employers to pay salaries to their employees or to make pension payments.
Direct Debit transactions continue to grow in use. This is reflected in data from the Office of National Statistics (ONS), with the total monthly Direct Debit average transaction amount being £102.80 in January 2025.
This has increased substantially from £97.57 in January 2020, demonstrating how trusted the Direct Debit payment system is by both consumers and enterprises. For businesses, there may be questions around Bacs payments and whether these are free for organisations to make or receive.
Here, we look into whether Bacs payments are free and what potential fees could be incurred by consumers or businesses.
Contents
- Are Bacs payments free?
- What Bacs payment fees may occur?
- Can Bacs be used for international transactions?
- Benefit from secure Bacs payments with Interbacs.
Are Bacs payments free?
It’s generally well known that Bacs payments are a cost-efficient option compared to many other payment methods. For a customer to send you a Bacs payment, such as a Direct Debit, it’s unlikely that they will have to pay much for this process. However, some may wonder—Can A Bacs Payment Be Stopped? The answer depends on the stage of the bacs payment.
As a business, you won’t be charged a large amount for receiving customer payments by Bacs Direct Debit. This is useful for businesses, especially those that rely on the majority of their customers paying for products and services through the Bacs Direct Debit payment system.
In addition, organisations that pay employees by Direct Credit can also benefit from cost savings. This is because administrative costs are reduced when compared to more traditional forms of payment, like cheques, or the significant security issues of paying by cash.
What Bacs payment fees may occur?
Your bank will typically charge you for collecting Direct Debits on your behalf. What you may notice is that this fee is different, depending on the provider. The charge is usually nominal, this could be based on a variable scale or ratio which is linked to the number of Direct Debit payments you’re receiving each month, type of business banking you use.
In terms of Direct Debit processing, your bank may offer you a flat fee with additional services available as add-ons which can be tailored to your specific business needs. A noticeably less expensive method of payment than debit or credit cards at approximately 3% per transaction, Direct Debits cost you & your customers less to set up and use on a regular basis.
If you partner with a Bacs-approved software supplier and bureau, such as Interbacs, you gain access to a wide breadth of services that are customised to match operational goals and individual requirements. Plus, you have options to diversify the services you need over time, so if your priorities change, you can expand or modify these services to accommodate.
Can Bacs be used for international transactions?
Simply put, Bacs is a UK-based system that enables payments between UK banks and UK bank accounts. It’s a system that’s designed for national transactions and is not typically used for international payments.
If your business has customers in Europe, they may be able to pay for your goods and services through SEPA Direct Debit. SEPA, or Single Euro Payments Area, enables euro payments to be made cross-border from countries that use SEPA, who are largely the 28 EU Member states.
Currently, these countries are the 28 European Union Member States, 3 European Economic Area (EEA) countries, and 8 non-EEA countries, such as Switzerland, Albania, San Marino, and Monaco.
Benefit from secure Bacs payment with Interbacs
Your business is in safe hands with Interbacs. As a Bacs-approved bureau, we have to achieve and maintain the highest standards of compliance and reliability so that we can deliver a first-class service for your organisation and customers.
It’s also reassuring to know that we have the experience to ensure your payments are processed securely and efficiently. Whether you’re a small, medium or large business, we have the specialist knowledge and expertise to support your Bacs payment needs.
Take the hassle out of managing payments and let our experts handle it for you.
Contact Interbacs today for a personalised consultation and unlock a more efficient, secure, and scalable payment solution.
Photo: © by ADragan from Getty Images
