BACS-UK

BACS UK retail bulk-payments clearing scheme 1968.

Definition

BACS scheme characteristics: (1) Direct Debit: customer authorises merchant to pull funds, regular recurring payments (utilities + subscriptions + insurance + loans), ~4.5B transactions annually. (2) Bacs Direct Credit (formerly Direct Credit): push payments salary + supplier payments + government benefits, ~1.7B transactions annually. (3) 3-day settlement cycle: Day 1 file submission, Day 2 processing, Day 3 settlement at banks. (4) Operator: Pay.UK (since consolidation 2018 of Bacs Payment Schemes Limited BPSL + Faster Payments Scheme FPSL + Image Clearing System ICS). (5) Direct Debit Guarantee: consumer protection scheme refunds erroneous DDs immediately. (6) AUDDIS (Automated Direct Debit Instruction Service): electronic mandate setup replacing paper mandates. (7) ADDACS (Advice of Direct Debit Amendments + Cancellations Service): mandate change notifications. (8) Bacs Approved Bureau accreditation: ~75+ commercial bureaux that process Bacs on behalf of customers without direct Bacs membership. (9) Successor: NPA (New Payments Architecture) Pay.UK 2018-2027+ modernization will replace Bacs + Faster Payments scheme with ISO 20022-native unified retail payments infrastructure, current operator selected Vocalink Mastercard 2022 to build new infrastructure.

Origin

BACS launched 1968 ; Bacs Payment Schemes Limited (BPSL) renamed 2003 ; Pay.UK consolidation 2018 ; NPA modernization 2018-2027+.

Example in context

UK utility company collects monthly bills via Direct Debit: customer signed DD mandate with utility ; utility submits Bacs Direct Debit file (Standard 18 record format) to its bank via AUDDIS Approved Bureau on Day 1 ; Pay.UK BACS processes Day 2 ; funds debited customer account + credited utility account Day 3 ; transactions appear customer + utility statements with reference.

Related terms

• CHAPS UK — high-value RTGS.
• Faster Payments UK — real-time successor.