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Bacs Direct Credit explained

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJun 20222 min read

For any business there are few things more important than receiving regular payments from customers. A UK study from 2020 found that 51% of small to medium-sized enterprises (SMEs) in the UK were affected by delays in payments for goods and services, with the amount owed totalling a huge £17.5 billion. At the same time, figures published by U.S. Bank found that 82% of business failures are caused by cash flow problems.

Although GoCardless doesn’t offer Bacs Direct Credit payments, it does allow businesses to take Bacs Direct Debit payments. By taking payments directly from customers’ bank accounts, a business owner is able to exercise a greater degree of control over the money they receive. Knowing when payments will be landing will make it easier for them to plan their finances and invest in the future, and we offer a range of options for accessing the Direct Debit scheme.

For the Bacs Direct Credit system, the questions most likely to be asked by a small business owner are as follows:

What are the benefits of Bacs Direct Credit?

The main benefit of using Bacs Direct Credits is that the funds clear into your account as soon as they land. Unlike some other forms of payment – such as cheques – there is no delay between the funds landing and the business owner being able to access them, a factor which greatly reduces the possibility of cash flow problems.

How do I stop a Bacs Direct Credit payment?

To stop a Bacs Direct Credit payment, contact the bank branch which handles your business account at least one working day before the payment is due to be credited to the account. Provide the sort code, account number, the amount being paid and the date on which it is due to be credited. The bank then explains whether they can stop the payment. The next step is for the payment to be recalled, via your payment service provider (PSP) contacting the PSP of the beneficiary. Even if the bank states that the payment has been recalled, double-check your statement to ensure that your account is re-credited within a few days.

What do I do if something goes wrong with a Bacs Direct Credit payment?

If a payment doesn’t reach your account when scheduled, it could be because the wrong account details have been used. The first step is to contact the organisation or individual which should have made the payment and ask them how it was sent – in this case by Bacs. Then ask them what sort code and account number they used, and what date the payment should have been credited to your account. If your PSP is unable to find the payment even after you’ve given them details of the organisation and their sort code and account number, get back in touch with the remitting organisation and ask them to start an investigation at their end.

Who controls Bacs Direct Credit payments?

In the majority of cases the control of a Bacs Direct Credit remains with the PSP of the payer. They are the organisation able to authorise Bacs Direct Credit payments and have the responsibility for overseeing the efficient operation of the system.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.