Bacs Direct Debit


Payment type	Direct Debit
Description	Automated Direct Debit payments provide an essential service for both consumers and organisations. Bacs is the governing body which oversees Direct Debit in the UK. Businesses can access the Bacs scheme directly through their bank, or via a third party provider like GoCardless. For more information, see our Direct Debit user guide.
Currency	£ (Pound Sterling)
Key markets	United Kingdom
Key fact	74% of all recurring payments by volume in the UK are made by Direct Debit via Bacs.
Payment use case	Recurring transactions, subscriptions, invoicing and instalments (for fixed or variable amounts). For example, online subscriptions, energy and telecom bills, gym memberships, charity donations.
Benefits	Significant reduction in involuntary churn - failure rates with Direct Debit are as low as 0.5%. Lower transaction costs compared to cards (1% or less, compared to around 3%).
Considerations	Not real-time - 4 to 6 day turnaround on payments, depending on whether it is the first payment for a particular customer or a subsequent payment.
Example merchants	Sage, SurveyMonkey, Facebook
Additional facts + figures	Over 6.34 billion Direct Debit payments were processed in 2017 (4% growth YoY). Direct Debit was created in the UK in the 1960s by a Unilever executive, as an automated way to collect regular payments from ice cream vendors, without having to ask permission each time.