How the Bacs cycle works
A business, or a bureau acting for it, sends Bacs a file of payment instructions. The Bacs scheme describes three days:
- Input day: the latest day to submit the file, between 07:00 and 22:30
- Processing day: the files reach the recipients' payment service providers, which process each payment
- Entry day: the recipients' accounts are credited and the sender's account is debited at the same time
What Bacs is used for
Bacs Direct Credit pays many accounts from one: salaries, pensions and supplier payments. Instructions can be submitted up to 30 days before the payment date. Direct Debit runs the other way, collecting from many payers under their standing instruction.
Pay.UK counted 6.86 billion Bacs payments worth £6.05 trillion in 2025, of which 5.0 billion were Direct Debits. The system dates from 1968.
Who connects to Bacs
A business submits to Bacs directly, with its own software, or indirectly through a payment service provider or a bureau, the usual route for smaller organisations. Payment service providers themselves connect directly or indirectly. For a fintech issuing UK accounts, receiving Bacs credits and honouring Direct Debits is what lets a customer have a salary paid in and bills paid out.
Bacs, Faster Payments or CHAPS?
- Faster Payments
- Single payments in real time, day and night, up to £1 million each. Bacs handles bulk files and takes three days.
- CHAPS
- Same-day payments with no upper limit, settled one by one at the Bank of England.
Where Bacs shows up in a platform
Modules that do the work
- Accounts & IBANsCustomer accounts with their own IBANs, on the partner bank and the rails you choose.
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
Platforms that need it
Guides that go deeper
- EMI or payment institution licence in the UK, or launch under a partnerE-money or payments, authorised or small: what the FCA asks for in capital, safeguarding and people, how long it takes, and when an agent or banking partner is the faster route.
- How to launch a business account with expense cards for SMEsThe account, the cards and the controls around them: what a business account with expense cards needs, from licensed partners and KYB to SCA and the interchange rules for commercial cards.
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.