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Payment processing times in the UK explained

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Last editedAug 20237 min read

Payment processing times refer to the duration for a monetary transaction to be completed, from when the customer initiates the payment to when the recipient's account is ultimately credited. In the UK, the time varies depending on the payment method used: Direct Debit transactions, for example, typically take 3-5 working days, while card payments can often be processed instantly or within 1-2 working days. Factors influencing these timescales include the financial institutions involved, transaction size, potential security checks, and whether the transaction is domestic or international. Understanding payment processing times is essential for managing cash flow and customer expectations in businesses of all sizes.

Types of payment methods

Business owners and consumers benefit from a wide range of payment methods. Each offers its pros and cons, as well as different processing times. Here are several of the most frequently used payment methods to consider.

1. Cheque payment processing time

Processing paper cheques was a lengthy process. Fortunately, today in the UK, all sterling cheques use the Image Clearing Scheme, which operates using a two-day cycle. If you pay in a cheque before the bank’s cut-off time, it should be cleared by the end of the following business day.


  • A secure form of payment

  • Faster processing than in the past


  • No longer widely used

  • Settlement time can be delayed by weekends and holidays

2. ACH, Direct Debit and Bacs payment processing time

Many customers prefer electronic bank payments directly from one account to another. In the United States, bank customers use the ACH or Automated Clearing House network to move money. ACH payments include credits, push payments, debits, or pull payments.

Pros of ACH payments:

  • Payments are secure

  • Transaction fees are kept low due

Cons of ACH payments:

  • Payments are processed in batches which can add to processing times

Payments sent within the UK use the Bacs network rather than ACH. The Bacs system is used for Direct Debit and direct credit payments. Both ACH and Bacs payments operate on a three-day cycle for settlement.

Pros of Bacs and Direct Debit payments:

  • Payments are secure

  • Transaction fees are low

  • It’s easy to set up recurring payment plans

  • Payments can be automated with a Direct Debit mandate

Cons of Bacs and Direct Debit payments:

  • Payments can be delayed by bank cut-off times

  • They’re not the fastest payment method

3. CHAPS payment processing time

Clearing House Automated Payment System, or CHAPS, provides a faster alternative to the Bacs system. Payments are received the same day they’re sent, provided you meet the bank’s cut-off time. Most UK high street banks and a few international banks are now part of CHAPS.


  • There’s no limit to transfer amounts, making it suitable for high-value transactions

  • It guarantees same-day payment when instructions are received on time


  • Same-day settlement is subject to strict cut-off times

  • It’s difficult to cancel a CHAPS payment

  • It costs more in comparison to other payment systems, between £25 - £30 per transaction

4. Faster Payment processing time

You may have heard of the Faster Payment scheme, which speeds CHAPS up even more. With Faster Payments, you can expect real-time payments between bank accounts, with funds typically arriving within minutes, though it can take as long as two hours in some situations.


  • They provide nearly instant payment processing

  • Payments can be sent 24 hours a day, including weekends and holidays


  • Transaction amounts are restricted up to £1 million depending on the bank

  • Both sending and receiving banks must be part of the Faster Payments scheme

  • Identity checks can cause potential delays

5. Credit card payment processing time

When a customer pays with a credit card, this brings in third-party payment processors and card networks, which can delay payment. The processor batches together transaction details throughout the day or week, sending it through to the card payment network for approval. Processing times can vary between 24 hours and three days unless you pay extra for the Same Day Settlement to expedite the process.


  • They cater to customer preferences, giving businesses a competitive advantage

  • They’re secure due to tools like encryption and tokenisation


  • Credit card companies charge higher fees, between 1.5% and 3% of the total transaction

6. International bank transfer payment processing time

International bank transfers move money from one account to another using international networks like SWIFT and SEPA. Transfer times vary widely depending on currency rates, time zones, intermediary banks, and holidays. Typical international bank transfer processing times vary between one and five working days. However, if you opt for EFT or wire transfers, you can speed up the process at a higher cost.

Pros of international bank transfers:

  • They allow you to accept payment from international customers

Cons of international bank transfers:

  • Fees are high for wire transfers

  • Processing times can take up to five days, if not longer

7. Instant payment processing time

GoCardless features like Instant Bank Pay use the power of open banking to provide real-time settlement and instant payment. Merchants can send a link to payers to verify their details and confirm payment within minutes.


  • IBP is 'confirmed' instantly. Funds aren't always available instantly for various reasons. Still, they are confirmed instantly, so a business can complete a sale knowing they will receive the funds that day or the next.

  • You can send and receive transfers 24 hours a day

  • Fees are lower than with card payments


  • Banks might impose limits on transaction values

Typical payment processing times by method in the UK

Here’s a breakdown of the payment processing time associated with each method mentioned above:

Payment method

Cut-off time

Processing/clearing time


Varies by bank, typically 15:30

Two business days


Varies by bank, typically end of business day

Three business days

Direct Debit

Varies by bank, typically end of business day

Three business days


Varies by bank, typically end of business day

Three business days


Varies by bank

Same day settlement

Faster payments

No cut-off time

Two minutes to two hours

Credit card

Depends on credit card processor, typically end of day

24 hours to three days

International bank transfer

Varies by bank, typically end of business day

One to five business days

EFT wire transfers

Varies by bank, typically end of business day

Same day settlement

Instant pay

No cut-off time

Real-time settlement

Key takeaways

  • Payment processing times vary by payment method. Direct Debit takes 3-5 working days, card payments are instant to 1-2 days.

  • Understanding processing times is crucial for managing cash flow and customer expectations.

  • Direct Debit offers secure, low-fee transactions.

  • Faster payments enable near-instant transfers 24/7 but have limits.

  • GoCardless provides innovative payment solutions like Instant Bank Pay for real-time settlement and Bacs Direct Debit for recurring payments.

  • Combining Instant Bank Pay and Direct Debit streamlines payment collection reduces admin, and maintains steady cash flow.

  • GoCardless products can greatly enhance a business's financial operations for one-off and regular payments.

Case study

Gravity Active Entertainment, an international chain of trampoline and leisure parks, has successfully leveraged Instant Bank Pay from GoCardless to improve payment processing times and enhance the customer experience. This allowed them to collect one-off payments and set up the Direct Debit mandate simultaneously - the key point being that a new  DD takes 6 days to receive payment (then it's three days subsequently, but for first payments, it's six days). Without the IBP, Gravity signed customers up for their membership, who used the service for five days for free and then cancelled their DD. IBP stops this by taking the initial payment while the DD mandate is set up. It enabled Gravity to increase revenue by preventing customers from using the service and then cancelling the DD before payment was taken.

Shane Williams, Customer Experience Director at Gravity Active Entertainment, highlights the benefits of Instant Bank Pay, stating, 

Moving to GoCardless Instant Bank Pay has reduced sign-up time by about 40 seconds - or 55% - which gives our staff more time to interact with our members and generate a better customer experience.

Additionally, by making GoCardless the sole option for new Very Important Bouncer (VIB) sign-ups, Gravity Active Entertainment has minimised payment failure rates and cancellations, safeguarding revenue.

The adoption of Instant Bank Pay has received positive feedback from customers, with Chloe Blake, Assistant General Manager at Gravity Bluewater, noting, 

We have had customers say how quick and simple the new process is – they just scan our QR code, choose the service they want, and it takes them straight to the payment page. It's all done within two minutes.

This streamlined payment experience, coupled with the reliability and security offered by Instant Bank Pay, has improved customer satisfaction.

Gravity Active Entertainment's transition to GoCardless has resulted in cost savings, as collecting payments via GoCardless is 50% cheaper than credit cards. Shane Williams emphasises this advantage: 

90% of subscription customers now pay via GoCardless, and we expect that to be 100% within months. 

With a substantial customer base and projected growth, GoCardless has become a significant revenue source for the company.

As Gravity Active Entertainment expands its offerings and plans for new sites, Shane looks forward to a continued partnership with GoCardless, expressing his satisfaction with the onboarding process and anticipating further opportunities. He concludes: 

We were one of the first businesses to trial Instant Bank Pay, and we're looking forward to discovering what additional opportunities GoCardless will open for our business.

Take control of payment collection with Direct debit via GoCardless. Reduce time spent on financial admin.

"Managing memberships and processing payments used to take two to three full weeks a month now that’s down to just 1 or 2 hours a week." - GoCardless customer Tom Marien, Owner, One Element

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How can GoCardless help?

GoCardless can improve your business's payment processing speed and efficiency with Instant Bank Pay (IBP) which leverages open banking infrastructure, allowing you to provide your customers with a simple and secure link to request payment with instant confirmation of funds. Instant Bank Pay can be combined with Direct Debit, a convenient and automated recurring payment system, to collect recurring payments and reduce the time it takes for new customers to pay you.

After receiving authorisation from your customer, your business can use Direct Debit to collect recurring payments on an ongoing basis, reducing the hassle of dealing with late and failed payments and boosting your cash flow. Direct Debit also offers strong consumer protections through the Direct Debit Guarantee, giving you and your customers peace of mind.

A new Direct Debit mandate takes 6 days to pay out, but with GoCardless, Instant Bank Pay and Direct Debit, you can set up recurring collection and still have your first payment within 24 hours! 

Setting up payment collection is fast and efficient with GoCardless. By automating the payment collection process, GoCardless drastically cuts down the administrative responsibilities of managing and tracking invoices for your team. 

GoCardless makes it quick and easy to get started with no contracts or long-term commitment required. You can set up instant, one-off, or recurring payments in the merchant dashboard in just a few clicks. GoCardless automatically creates and sends all the necessary forms, doing all the heavy lifting for you. You can also connect to GoCardless via over  350 partner apps, such as Xero and Quickbooks.

Discover how GoCardless can automate payment collection, making it easier for you to concentrate on what matters most - your business growth.

Frequently asked questions 

What is “payment processing time”?

Payment processing time" refers to the duration for a financial transaction to move from initiation to completion - from the moment a customer initiates a payment, either through Direct Debit or card payments, until the funds are fully settled in the recipient's account. This time frame can vary, typically between an instant and a few business days, depending on various factors such as the type of payment method used (Direct Debit, debit or credit card), the payment processor, interbank rules, and even the time of day the payment was initiated. In the UK, for example, Bacs Direct Debits typically take three working days to process, while Faster Payments can usually settle within two hours but can take up to the end of the next business day. Understanding these timescales is essential for businesses in planning cash flow and providing accurate customer service.

How do payment systems work in the UK?

Debit and card payments. Direct Debit, managed by Bacs Payment Schemes Limited, is an electronic pull-based system that allows businesses to take secure, pre-authorised payments from a customer's bank account. The payment is processed within three working days, ensuring a predictable cash flow. On the other hand, card payments are processed via card networks like Visa or MasterCard and are often facilitated by a merchant acquirer. The processing time can vary from an instant to a few days, depending on the card type and the merchant acquirer's policies. Both these systems are governed by the Financial Conduct Authority (FCA) regulations, ensuring reliability and trustworthiness in every transaction.

How long does a UK bank transfer take?

The processing time for a bank transfer can vary in the United Kingdom. For most transactions, the Faster Payments Service ensures that the transfer is nearly instantaneous, typically occurring within a few minutes. However, it's worth noting that some transactions can take up to 2 hours depending on the banks involved, their respective processing systems, and if there are any security checks in place. Suppose the transaction does not fall within the scope of the Faster Payments Service, for example, a high-value transaction or an international transfer. In that case, processing fully can take 1 to 3 business days. It is always advisable to check with your specific banking institution to understand their precise processing times.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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