The financial system employed by banks and major financial institutions in the UK is based on automated payments, which are without a doubt an essential service for both businesses and consumers. Bank Account Clearing System (BACS) is an electronic system that makes payments directly from one bank account to another. It is commonly known as direct bank transfer or wire transfer and is a gateway that saves you from making payments online.
It is popular for carrying out more transactions than the total number of people to have ever walked on earth. It is operated by 16 major UK Clearing Banks and building societies that are a part of the membership organisation. In order to understand how BACS has expedited the process and how quickly it can clear a payments, it is imperative to understand the basic types and uses.
BACS payment has two main payment types:
- BACS Direct Credit
- BACS Direct Debit