About Bacs

1. Bacs Payment Schemes Limited (Bacs) is a not-for-profit, membership based industry body owned by 13 of the leading banks and building societies in the UK and Europe.

2. Responsible for the schemes behind the clearing and settlement of automated payments in the UK including Direct Debit and Bacs Direct Credit, Bacs has been maintaining the integrity of payment related services for four decades.

3. Since its inception, more than 68 billion transactions have been debited or credited to UK bank accounts via Bacs.

Historical facts

4. In 1967 a pilot payment scheme was run by the banking industry which allowed Unilever to debit sums of money due from its retailers.

5. The Unilever trial was a success and in early 1968 a wider service was introduced known as the Inter-Bank Computer Bureau (latterly Bacs).

6. The first transactions supplied to the Inter-Bank Computer Bureau were submitted on magnetic tapes each containing 2400ft of film.

7. Couriers transported tapes between banks and lots of manual labour was required to upload data to the system.

8. Some of the first mainframe computers used to process payments were the size of a wardrobe!

9. With a processing power of just 16k memory – far less than that of a modern mobile phone – it took four computers to process a million transactions.

10. In 1971 the Inter-Bank Computer Bureau re-branded to become Banker’s Automated Clearing Services (BACS), a name more familiar today.
 
11. By 1975 BACS was processing in excess of 237 million transactions a year. These were all processed manually by a dedicated team of computer operators working non-stop from 08:00 on Monday until 16:00 on Saturday.

12. In 1983 BACSTEL was launched, a telecommunications based system that signalled a massive leap forward in technology and enabled payment files to be submitted electronically for processing at BACS.

13. In 1986 BACS launched its first TV advertising campaign featuring cartoon Direct Debit flying men designed to provide consumers with a short, fun introduction to the benefits of Direct Debit.

14. In 1986, the Banker’s Automated Clearing Services became known as just BACS. The change came about as building societies joined the organisation’s membership base.

15. In 1988 BACS commissioned the first Consumer Payments Survey (CPS), an annual survey run in conjunction with Ipsos-MORI and providing a measure of consumer attitudes and behaviour when it comes to money, banking, household bills and Direct Debit.

16. In 1996 BACS introduced AUDDIS, an automated service for electronically lodging Direct Debit Instructions.

17. By 1999 telecom submissions had become so popular that the use of magnetic tapes was discontinued.

18. 2003 was a busy year at BACS. The organisation split into two companies:

- Bacs Payment Schemes Limited (BACS), the organisation responsible for Direct Debit, Bacs Direct Credit and Standing Order transactions which oversees payment scheme rules and maintains the integrity of each of these financial products.

- Voca (now VocaLink), the commercial organisation responsible for providing the infrastructure used to process the payments.

19. In 2003, BACS also launched BACSTEL-IP - an internet based submissions channel which gives organisations the ability to track payment files at any time and from anywhere.

20. In 2005 the Department for Work and Pensions begins to process all benefit payments by BACS Direct Credit.

21. In 2006 BACS switched all processing to BACSTEL after the successful migration of over 100,000 businesses to the new BACSTEL-IP channel.

22. In January 2007, BACS made CPS results public for the first time.

23. Later that year BACS rebranded to Bacs and also created The Smarts – a family of animated cartoon characters designed to help improve consumer understanding of how Direct Debit works.

Some mind boggling numbers

24. In the first year of operations, Bacs processed just over 9 million transactions. Today, the organisation can manage ten times number that in just one day. In November 2007, Bacs was responsible for processing 90.3 million items in a single day achieving a new record daily peak and surpassing previous volume levels by 8.4%.

25. In the last three years alone, more than 14.5 billion transactions were debited or credited to UK bank accounts via Bacs.

26. In 2007 5.5 billion payments went through Bacs' two principle schemes, Direct Debit and Bacs Direct Credit.

27. Payment files processed in 2007 equated to approximately £3.7 trillion.
 
Direct Debit facts

28. A Direct Debit is an instruction from a customer to their bank or building society authorising an organisation to collect varying amounts from their account.

29. Almost three billion Direct Debits payments were processed in 2007.

30. Three quarters (75%) of adults have at least one Direct Debit commitment.

31. Independent research conducted in November 2007 by Carbon Footprint Limited, highlighted that the carbon footprint generated by a Direct Debit is eight times less than that of a cheque – making it the greener and smarter way to pay for regular commitments. 

32. Direct Debit is now the most popular way to pay regular household bills (43% of adults agree with this statement).

33. Research released by Bacs in 2007 showed that Direct Debit can save consumers more than £200 a year across regular household and individual bills.

34. Direct Debit volumes are predicted to grow to 4.1 billion by 2015.

35. Paying regular bills by Direct Debit rather than by cheque can save consumers up to 7 hours over the course of a year.

Bacs Direct Credit facts

36. Bacs Direct Credit is a simple, secure and reliable service, which enables large and small organisations to make payments by electronic transfer directly into bank or building society accounts.

37. Bacs Direct Credit is mainly used by businesses and public sector organisations for paying wages and salaries; suppliers; pensions; employee expenses; insurance settlements; dividends; and refunds.

38. Over 90 per cent of the UK workforce is now paid by Bacs Direct Credit – that’s four million weekly wages and 25 million salaries a month.

39. Research conducted by Bacs in 2007, in conjunction with Continental Research, showed that £18.6 billion worth of outstanding payments is owed to Britain’s small-to-medium sized enterprises (SMEs) – a leap of £2.6 billion on the previous year.

40. Bacs SME figures also showed that the average amount owed to an SME at any one time is £30,000. In the same piece of research, Bacs also found that almost a fifth of SMEs (19 per cent) now employ a dedicated person to chase in late payments – losing an average of 17 working days a year.