Whether you’re new to the payments industry or you’re a finance team thinking about processing Bacs payments for the first time, understanding the basics will help you get up and running quicker and more effectively.
If you’re looking to sign up for Bacs software for the first time, this is the guide for you.
Or if you need advice or to ask a question, we’d love to help – click the button below to get in touch.
A Bacs payment is a bank-to-bank transfer between banks in the UK and is the standard payment type used by businesses in the UK. Bacs is a central clearing house for all UK Banks.
Bacs payments are easy and inexpensive, they help you understand your cash flow with simple and effective reports, they are cheaper than cheques and eliminate the need for postage, and they make reconciliation much easier by generating a single debit from your account so you don’t have to track individual payments.
YES, There are 2 core types of Bacs payments:
• Direct Debit: An instruction from a person to their bank or building society, authorising the organisation they want to pay to collect money from their account. For example your monthly gym membership.
• Direct Credit: An electronic deposit to your account. For examples your monthly salary.
The minimum information you require is the sort-code, account number, name, amount. For debits, the reference is also mandatory.
Yes, anyone can make a Bacs payment, as long as their bank offers this service. Businesses tend to use a Bacs product or service rather than using bank portals (for example) as it’s easier, faster, and less prone to errors. Or alternatively a Bacs bureau for handling the Bacs transfers on their behalf.
A SUN, or Service User Number, is a unique number for businesses collecting or paying via Bacs. You cannot use Bacs to receive or send electronic payments unless you have a SUN.
As a business receiving and/or paying money electronically through Bacs, you will either have and use your own SUN to facilitate the Bacs process (direct SUN) or, if you don’t have your own, you pay a small commission to a third party to manage it for you (indirect SUN).
SUNs are only issued to businesses who are sponsored by Bacs members (the UK’s major banks). Therefore you need to apply to your bank to make an application or get a bureau to set up a SUN on your behalf but retain actual ownership of it.
Certain banks provide services that allow you to make Bacs payments without needing to obtain a Service User Number, such as Natwest Autopay Online. This gives businesses the ability to make Bacs Payments by expending a limited number of monthly credits, paid via a subscription fee, and subjected to a pre-approved credit limit.
A bureau will process and automate Bacs payments and collections on your behalf, thereby removing the need for your own software. This (indirect) method of Bacs submission is often used by companies who don’t want to (or are unable to) do this themselves.
Bacs reports feedback information on your submissions. This includes Credit payments, Direct Debit collections and Direct Debit Instructions. There are multiple reports produced by the BACS service, each report giving the Bacs user different information. It’s mandatory for some of these reports to be downloaded and acted-upon.
Bacs reports feedback information on your submissions. This includes Credit payments, Direct Debit collections and Direct Debit Instructions. There are multiple reports produced by the BACS service, each report giving the Bacs user different information. It’s mandatory for some of these reports to be downloaded and acted-upon.
Here at paygate, we have a long heritage of helping businesses achieve Bacs payment efficiency. Our payment platform is one of the longest established Bacs approved software solutions available on the market. To our customers, we’re trusted experts.
We’d love to speak to you about your payment challenge, answer any questions or offer advice. Complete the form below to reach out.
If you’d like to discuss your business requirements and how paygate can help, get in touch.
"*" indicates required fields
Bacs, which stands for Bankers’ Automated Clearing Services, is the UK’s primary payment scheme for processing bank-to-bank transactions such as Direct Debits and Direct Credits. Businesses submit payment files electronically, which are processed and settled over a three-day cycle, making it ideal for payroll, supplier payments, and recurring billing. Overseen by Pay.UK, it is one of the most trusted and cost-effective payment methods available to UK businesses.
A Bacs payment is an electronic bank-to-bank transfer processed through the Bankers’ Automated Clearing Services scheme, commonly used for payroll, Direct Debits, and supplier payments across the UK.
If using a bureau service, the bureau handles submission approvals, and you typically do not need your own SUN.
There are two types of Bacs payments: Direct Credit, used to send funds such as salaries and supplier payments, and Direct Debit, which allows businesses to collect agreed payments directly from a customer’s bank account.
Bacstel-IP is the secure internet-based transmission service used to submit payment files to Bacs, replacing the older dial-up system and providing a more reliable and efficient way to send transactions electronically.
Bacs payments typically take three working days to clear, as they follow a fixed processing cycle of submission, processing, and settlement.
Bacs payments are generally low-cost compared to other payment methods, with charges varying depending on whether you submit directly or through a bureau provider, though fees typically cover transaction processing and any associated software or membership costs.
Businesses can either apply to become a direct Bacs approved submitter, which requires membership and accredited software, or use a Bacs bureau provider to handle submissions on their behalf — the latter being the quickest and most cost-effective route for most businesses.
✓
| paygate on prem | paygate v2 | paygate v3 | |
|---|---|---|---|
Security policy manager * Includes: password complexity manager, inactive timeout, time restrictions, IP address restrictions | ✓ | ✓ | ✓ |
AWS ISO27001 hosted * Primary fail over and back up UK data centres | ✓ | ✓ | |
SFTP file uploads/downloads *Secure way to move files across the internet, customers can use their own certificates | ✓ | ✓ | ✓ |
| Gemalto security tokens MFA | ✓ | ✓ | ✓ |
| Email MFA | ✓ | ||
| SMS MFA | ✓ | ✓ | ✓ |
APP MFA * Works with common auth apps such as Google Authenticator, Authy. Works on Android or iOS. | ✓ | ||
| PG Platform ISO27001 | ✓ | ||
Fraud tool *Currently support Blacklists and Whitelists. In a blacklist you add various sortcodes / account numbers and the system will prevent any payment to those accounts. In a whitelist you add sortcodes and account numbers and the system will ONLY allow payments to accounts on the whitelist. We include various tools to help build and maintain the lists. | ✓ | ||
GDPR subject access request * Search tools to help perform a GDRP lookup. Then can optionally ‘sanitise’ personal data from the system. | ✓ | ✓ | ✓ |
GDPR Data cleansing *Remove historical data by bulk or individual. | ✓ | ||
Browser compatbility * We maintain support for Chrome, Edge and Firefox. | ✓ | ||
Built for performance * Version 3 runs on super modern, high-end infrastructure | ✓ | ||
Single Platform * Customers have a single user account that they can use across all services (Enterprise, Online, Validate, etc). | ✓ | ||
Agent rebuilt key management system * Very secure way to get files to and from the Paygate cloud. Supports ways to automate files being sent into the paygate cloud and retrieving reports from the cloud. Key management was rebuilt for V3 to further increase security. | ✓ | ||
HTTPS uploads/downloads * paygate v3 supports both SFTP and HTTPS. | ✓ | ||
In browser File and Folder handling * Allows customers to securely organise their files and folders that are stored on paygate | ✓ |
| PG on prem | PG Ev2 | PGv3 | |
|---|---|---|---|
| Logging tickets by email | ✓ | ✓ | ✓ |
| Logging tickets by portal | ✓ | ||
| Logging tickets by phone | ✓ | ✓ | ✓ |
| Dedicated account management | ✓ | ✓ | ✓ |
| Uptime improvements | ✓ | ||
| Ongoing development | ✓ | ||
| Bug fixing | ✓ | ||
|
Auto File Import *Automatically imports a payment file and validates it. Users no longer need to manually browse for and import a file, paygate will do this in the background and present the validation results to the user. |
✓ |
| PG on prem | PG Ev2 | PGv3 | |
|---|---|---|---|
|
Designer in browser * In V2 Workflows use an older style desktop app. In V3 workflows are built and managed in the Paygate Browser app. It’s much easier to deploy and manage. |
✓ | ||
| Designer 3rd party app | ✓ | ✓ | |
|
Improved logging * A feature mainly for PS/CS to help them diagnose problems with workflows. Problems can be diagnosed and fixed faster. |
✓ | ||
|
New scheduler triggers * A new trigger type that allows the user to set up a workflow like you set up a meeting in Outlook. For some, this is more flexible and easier to understand than using CRON. |
✓ | ||
|
Triggers for multiple workflows * You can use a single trigger to start multiple workflows. It’s a simple feature that will make things easier to manage if you have a lot of workflows. |
✓ | ||
|
Workflow validation * Troubleshoots new workflows, validation |
✓ | ||
|
Workflow chaining * Allows a workflow to call another workflow. Using this you can simplify large complicated workflows in smaller separate ones. Easier to manage and diagnose issues. |
✓ | ||
|
New nodes * Various new nodes that help to build new types of workflows or help manage existing workflows. |
✓ | ||
|
Full documentation V3 will be fully documented with help guides and tutorials.
and tutorials * |
✓ | ||
|
Multiple filename variables * Supporting multiple filename variables should make designing complex workflows a bit easier. |
✓ | ||
|
Future developments * Pure Excel Importer – XLSX; BACS Calendar Widget; Workflow Timeline; Workflow / Mobile App notification / management; S3 Connector |
✓ | ||
|
Download and distribute A Reports * When you have workflow and HSM you can automate the entire BACS report download process. They can automatically be converted to other formats for integration into finance apps. They can be emailed to customers as html, pdf or zips. They can be made available for collection via SFTP. Or, if you use Agent, they can be security delivered to the customer’s private network. |
✓ | ✓ | ✓ |
| Partial submission | ✓ | ✓ | ✓ |
|
Lightsout submission * No signing |
✓ | ✓ | ✓ |
| Standard nodes for initiation | ✓ | ✓ | ✓ |
| PG on prem | PG Ev2 | PGv3 | |
|---|---|---|---|
| Batched bureau submissions | ✓ | ✓ | ✓ |
| Manual & Automated submission builder | ✓ | ✓ | ✓ |
| Customer import | ✓ | ✓ | ✓ |
| Bacs reporting tools | ✓ | ✓ | ✓ |
| Recall Bureau Customers by ID | ✓ | ||
|
Submission Re-entry * Complete your submissions over any amount of time
|
✓ | ||
|
Familiar workflow throughout *It will be familiar to V2 customer but they will notice improvements. |
✓ | ||
| Revamped manual submission mode *This is completely new in V3 Bureau.
Those customers wanting a more manual way of building their submission (Rather than using Jobs) will find a new, efficient way of working.
|
✓ | ||
|
Drag and drop files from anywhere *Like in other areas of V3. User can just drag and drop file in Bureau for processing. They can also use the Restricted File Browser and Server file browser – that add more security – if they wish. |
✓ | ||
|
Support for multiple file formats per submission * No longer limited to single Standard 18 submission for example
|
✓ | ||
|
Better default filename support *Makes working with files easier. |
✓ | ||
|
Usage Reporting over data range *Small but useful improvement to reporting. User can set a date range on the usage report. |
✓ |
| PG on prem | PG Ev2 | PGv3 | |
|---|---|---|---|
|
Validate *Validate is integrated in V3 and so customers that have both products can access them from the same client with the same account. |
✓ | ||
|
API Access *Validate API and the Payment API.
|
✓ | ||
| 4x Faster | ✓ | ||
|
Save Submissions *Save an ‘in-progress’ submission and return to it later. Build up a submission during the day |
✓ | ||
| Improved payment and submission searching | ✓ | ||
|
Customisable dashboard *Many useful, module specific, dashboard widgets, e.g. Payments, collections, workflow, etc. |
✓ |
| PG on prem | PG Ev2 | PGv3 | |
|---|---|---|---|
| Enhanced reporting including real-time usage | ✓ |
