Established in 1968 by Dennis Gladwell, it is operated and owned by APACS. The Bacs organisation introduced an alternative to making payments using cheques and cash. This payment system is encrypted and can only be processed by authorized banks making it secure and efficient.
BACS stands for Bankers’ Automated Clearing System, and it is a type of payment which includes the transfer of electronic money between banks, these payments can be either direct debit or direct credit, these payments are usually used to pay pensions and salaries, often these payments take around three business days to clear after submission of the payment file to the Bacs system.
When a Bacs payment is made by a customer, firstly the payment is submitted to BACS, it is then validated by BACS and within three working days the payment will then be credited to the customers bank account.
A main reason to explain the usage of Bacs payments is that the charges per payment are cheaper than any other payment service and Bacs files are supported by every payroll and accounting software.
Bacs are used by banks as they are considered extremely cost beneficial as they do not include mediating banks or payment processors which saves money on both sides meaning it is also time effective.
Bacs payments are used by the government for pension and welfare payments due to Bacs allowing the scheduling of consistent payments via its direct credit or direct debit alternatives.
Typically, a payee should only expect to pay between 5p and 50p per Bacs transfer including any added transaction fees which are charged by your bank.
Bacs form of electronic bank-to-bank transfers are exclusively used in the UK.
However, while considering that Bacs are a cost beneficial and time effective form of payment a negative of this is that these payments can only be processed on working days within a specified time frame meaning they have strict cut-off times.
These types of payments also carry high risk as they cannot be cancelled nor can they be traced, if your faster payment fails to arrive you will not receive compensation.
In comparison, Bacs require three business days to clear while Faster Payments clear immediately however, Bacs remains as the primary payment option due to a known reliability it carries as it has been the standard for decades.
Bacs is a secure form of payment which is popularly used and widely accepted within the UK. Bacs is a convenient method which allows customers to have a cost-effective form of making and receiving payments which we are pleased to offer to GAPinsure.com customers.