What is the Bank Automated Clearing System?

Bacs Payment Schemes Limited, formerly Bankers Automated Clearing Services, is an institution providing the clearing and settlements of UK automated methods Direct Debit and Bacs Direct Credit in addition to providing management services are based. Pay.UK, initially known as New Payment System Operator, acquired Bacs becoming its subsidiary on May 1st, 2018 - leading to the handing over of all Bacs responsibilities in Direct Debit, Direct Card, Current Account Switch Service, Cash ISA Transfer Service and Sort Code Directory to Pay.UK.

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How Does the Bank Automated Clearing System Work?

Since the 2017 when Bacs was established, there have been at least 130 billion debit and credit transaction to British banks accounts from Bacs. Also, at least 6.34 billion UK transactions were done by the same Bacs. Bacs transactions were at the peak at the end of August 2018, and the daily transaction numbers processed also reached its maximum at 114 million besides the 580 million of transactions throughout the month.

Recent Developments

The historic 5.8 billion Bacs processed transitions amounting 4.4 trillion Euros in 2014. I was made up of 3.6 billion Direct Debits. The important 2014 transactions fell sort of the 2015s six billion transactions valued at 4.6 trillion Euros. With at least 239 million more Direct Debits than the 2014 representing the historic annual increase in payments. 2015 was marked with a significant record of 103 million transactions made in a single day in July for the first time the daily transaction went above the 100 million levels. Also, during the same year, the payment number handled by Bacs hit the 110 billion since 1968. In 2016, there was a continued rise on the transaction records with the processing of 6.22 billion transactions with a worth 4.8 trillion whereas the number of Direct Debit payments was past 4 billion for the first time.2016 was also another historic as the daily transaction numbers peaked the bar twice with daily system transactions of Aprils 109.3 million which was above the 2015 Julys 103 million. At August end, the number of daily processed transactions hit 114 million while Aprils monthly transactions were 580 million. There was an expansion of Bacs scope covering third-party management service provision including Cash ISA Transfer Services, and the development, management, and high profile Current Account Switch Service's proceeding ownership which was introduced in 2013. The service has shortened current accounts switch time to seven working days besides guarantee support.

Products and services

Direct Debit is the written instruction from a customer to either the bank or building society approving an organization collection of the different amount from their account for frequent payments for all bills. At least 4.2 billion Direct Debits processing was done in 2017. Direct Debit Guarantee which is safeguard backed by money is the protection for Direct Debit. Direct credit is a service enabling the institutions to pay into their bank or building society accounts directly. The statistics have more than 150,000 UK institutions using Bacs Direct Credit which has been broadly accepted for the payments of benefits, mages, salaries where about 90% of the UK entire labor are paid using this besides the over one billion benefits. Bacs Direct Credit is also used for the payments of wide range services such as pension, employees expenses, insurance settlements, dividends, and funds.

Current Account Switch Service

The Current Account Switch Service provides a way of switching current accounts to small companies, trusts, and small charities. The service was intended for increased competition, support new banks entry into current accounts market place and provide huge switching options from one bank or building a society to consumers. Beginning 2013 when Current Account Switch Service was started, it switched at least 5 million UK current accounts with a seven-day switch success rate of 99.4%. The service is offered by 47 top street banks and building societies higher than 33 at the initiation. Current Account Switch Service move all old account activities to the new one opened in another bank or building society. The activities include both inwards and outwards payments, account balance, and closing the old account. The main characteristic that ensures no loss of service to the customer is that the transfer happens on the seventh day which is the last for the service hence the customer uses the account up to when it is transferred, and he starts using the new one. Besides, there is a Current Account Switch guarantee which protects the customers by compensating for any fee and charges account holders suffer from during the transfer. 

Other managed services 

The Cash ISA Transfer Service started in 2012 deals with easier and quicker process for transferring, it reduces paper flow and improves biller efficiency and Biller Update Service started I 2013.