What is a BACS payment? Paying overseas employees (2024)

FAQs

What is the international Bacs payment? ›

BACS international payments work in the same way as standard BACS, which means that you can deliver payroll overseas using a similar process to your UK staff and ensure that staff are paid on time, wherever they are in the world.

ACH: America's original (and most trusted) electronic payment rails. Established in 1972, ACH — named after the clearing house that processes ACH payments — is the US equivalent of BACS in the UK, and works in a similar way.

There are two options to process Bacs direct credit payments, or “Bacs out”. You either run it through your bank, or you go to a Bacs Approved Bureau to process your Bacs payments. Either way, in order to make a Bacs payment as a business you'd have to sign up with Bacs in one way or the other.

If you pay the household bills or use a subscription service, you will have made a payment via BACS before. This is where you give permission for a company to automatically take payments from your account on an agreed schedule, such as each month. Examples include mortgage payments, utility bills or council tax.

What is a Bacs payment? A Bacs payment is a bank-to-bank transfer between banks in the UK.

ACH payments. The equivalent system to the UK's Bacs is the Automated Clearing House, or ACH. This network only works within the United States, so you won't be able to send payments to UK clients using ACH.

Swift payments vs BACS

BACS are ideal for everyday transfers such as utility bills, and are usually fee-free. BACS transfers can be made only within the UK and aren't instant, taking up to three working days. With Swift you have the security of tracked international payments, in any currency.

Is Bacs the same as bank transfer? Bacs is the same as a bank transfer and both can be used to mean the same thing. Money is transferred in the standard bank to bank way via the internet or phone banking. The only thing to note is that other types of bank transfers that you may hear about are Faster Payments and CHAPs.

To make Bacs Direct Credit payments you submit your payment data - including amount of each payment, PSP account numbers, sort codes and dates - via a bureau or direct access depending on which method you choose. The data is sorted into payments to each of the PSP and then transmitted to each institution.

What is the maximum amount you can pay by BACs? ›

The upper payment limit for BACS payments is £250,000 per transfer.

How much does a Bacs payment cost? Bacs payments are one of the cheapest ways for businesses to transfer money between banks. You can expect to pay between 5 and 50p — plus any additional fees charged by your bank — per transaction.

Most organisations benefit from paying salaries or wages by Bacs Direct Credit – in fact, eight in ten employees in the UK are paid this way.

A Bacs payment is one of the most common bank-to-bank transfers in the UK. There are two main types of Bacs payment; Direct Debit, where one party has been given permission to pull money from the bank account of another party, and Direct Credit, where a party deposits the money in the other party's account.

Bacs payments messages use a proprietary format known as Standard 18 which comprises both a record structure and a field structure within those records. Defined length fields predetermine the information that can be provided within the payment.

To make Bacs Direct Credit payments you submit your payment data - including amount of each payment, PSP account numbers, sort codes and dates - via a bureau or direct access depending on which method you choose. The data is sorted into payments to each of the PSP and then transmitted to each institution.

Bacs bank transfers are extremely safe for your customers. Firstly, only approved organisations can collect Direct Debit payments, either independently or through a heavily vetted Bacs Approved Bureau or Facilities Management Provider, like Interbacs.

Rather than going through an ACH system like BACS, which can take up to three days, a wire transfer is more direct. It is, theoretically, quicker too. You instruct your bank of the transfer you want to make, including the sum and the details of the recipient – whether domestic or international.