Is A Bacs Payment Instant?

When it comes to collecting customer payments and paying your employees there is no other system in the UK more efficient & reliable than the Bacs payment system. Bankers' Automated Clearing Services (Bacs) was first introduced in 1968 and is now managed by Pay.UK.

Almost all of the UK’s major banks use the Bacs payment system. In fact, Direct Credit was the second most popular payment method used between businesses in 2023, with nearly a third of all payments transacted using this method. 

There is also a high level of trust held by consumers for Bacs payments, such as Direct Debits and Direct Credits. Approximately 90% of consumers use Direct Debit for regular payments. 

Pay.UK data shows that in the 12 months to March 2025, the value in millions of both Direct Debits and Direct Credits rose by 4% on the previous year. This illustrates the reliability and accessibility of Bacs payments for businesses and customers. 

Contents

• Is a Bacs payment instant?
• What details are needed for a Bacs payment?
• Why use Bacs payments?
• Interbacs: your Bacs payments partner. 

Is a Bacs payment instant?

The simple answer is no. A Bacs payment doesn’t happen in real time or in a few minutes. The truth is that to ensure the payment is fully approved and withdrawn from the right account for the right amount at the right time, there needs to be a process of checks and balances in place to reduce fraud or error. 

While a Bacs payment isn’t instant, it can happen in a relatively short span of time. The Bacs payment cycle for both Direct Debits and Direct Credits completes over three working days:

Day one

The payment data for a Direct Debit or Direct Credit is entered into the Bacs payment system. 

Day two

The payment is processed, with information shared between the payer’s bank and the recipient’s bank. 

Day three

The payment is withdrawn from the payer’s bank account and delivered to the recipient’s bank account. 

With a Direct Debit payment, this would move from a customer’s account to your business account. If the payment is a Direct Credit, this could be a salary payment to one of your employees. 

Ultimately, Bacs payments are ideal for customer transactions, as you know the date and amount of payment which enables you to plan your finance streams accordingly. But, a Bac's payment can be delayed. 

What details are needed for a Bacs payment?

So, what details are needed for a Bacs payment? Setting up customers to pay for your goods and services by Bacs payment, such as Direct Debit, is simple and straightforward. The customer needs to fill out a Direct Debit mandate form. This will include the customer’s name, address and bank details.

The customer will also agree to a payment amount and date on this Direct Debit instruction. There is flexibility within the Direct Debit system, so that your customer can pay regularly by this method, or can transfer funds on an irregular or one-off basis. 

If you’re a subscription-based enterprise, there can be additional benefits to using Bacs payments. Direct Debits allow you to adjust the amount you collect from customers, which can be adapted to suit the specific or changing needs of their subscription with you. 

As long as customers are given advance notice of any Bacs payment changes, such as amount or date of payment, these transactions can be updated to align with customer or business needs. 

Why use Bacs payments?

Here are five major reasons why businesses benefit from Bacs payment integration:

• Reliable payments

The regular nature of Bacs payments means that businesses are able to forecast near and medium term revenues by tracking their customer Direct Debit payments. Bringing a relative sense of security with future funds, Bacs payments enables businesses to effectively manage financial targets and planning. 

• Improved cashflow

Without automated payments, a business’s cashflow may be a little unpredictable at times. Financial uncertainty can create significant pressures for enterprises. One way to avoid this inconsistency is to encourage customers to pay by automated Direct Debits so that your income is steady and continuous. 

• Minimised payment failure

There is a lower level of payment failure with Bacs payments in comparison to card payments. These could be subject to expiry date or cancellation issues, whereas Direct Debits are linked to customer bank accounts and are automated to leave on an agreed date. 

• Reduced administration

Reduced levels of paperwork create more time for your teams and give them the space to focus on your business priorities. Automated Bacs payments are also processed in bulk, creating time and cost efficiencies. 

• Enhanced efficiency

With automated Bacs payments, your business won’t have to waste time with payment reminders, manual invoicing and chasing late payments. This will give your teams back valuable time to spend on streamlining and improving your business processes for continued growth. 

Interbacs: your Bacs payment partner

We successfully manage Bacs payment systems for organisations across various industries, from start-ups to large established multinationals. With a compelling industry reputation, Interbacs are ideally positioned to support all of your business account needs and help you enhance revenue streams. 

Ready to make the switch? Contact Interbacs today for a personalised consultation and discover how we can optimise your Bacs payment processes.

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