A Bacs payment is a bank-to-bank transfer between banks in the UK. It is one of the most common bank-to-bank transfers in the UK and is used for two main types of payments: Direct Debit and Direct Credit.

• Direct Debit: This is when one party has been given permission to pull money from the bank account of another party. Examples of Direct Debits include monthly council tax payments, internet bills, utility bills, and so on.

• Direct Credit: This is when another party deposits money into your account. Examples of Direct Credits include refunds, salary payments, pension payments, and so on.

Bacs Payment Schemes Limited, previously known as Bankers Automated Clearing System, is responsible for the clearing and settlement of UK automated direct debit and Bacs Direct Credit and the provision of third-party services. Bacs is a membership organization consisting of 16 of the UKs leading banks.

Bacs payments are not same-day payments or instant, but they are still the number one bank payment method businesses use. The payments take three working days to clear, so money paid into your account on Monday will clear on Wednesday. Bacs payments are considered very cost-efficient, with cheaper per payment charges than any other method.