There are two main ways in which organisations can process Bacs payments:
- A Direct Debit collection: an individual or business gives you permission via a Direct Debit Instruction (DDI), which is either a paper form (sometimes known as a mandate) or electronic. This authorises you take payments directly from their bank account, according to agreed timing and amounts (fixed or variable). Obtain more information on Direct Debits here.
- A Direct Credit: an outbound payment from an organisation to bank or building society account belonging to a company or individual. It is a payment method that has been widely adopted for supplier payments, customer pay-outs, dividends, and to pay 90% of the UK’s workforce.
There are two ways that a business can make a Bacs payment or collection:
- Direct Access: An organisation can create and send payment files directly to Bacs using Bacstel-IP as a Direct Submitter. Bacstel-IP is a delivery channel that gives corporate user’s secure online access to Bacs. Payment files can be submitted using Bacs-approved software.
- Indirect Access: An alternative to submitting directly to Bacs over Bacstel-IP is to use a bank or commercial Bacs-approved bureau to submit your Direct Debit payment files to Bacs on your behalf, in this model you are known as an indirect submitter.