Bacs corporate information
What is Bacs?
Bacs is a not for profit, membership based industry body, owned by 15 of the leading banks and building societies in the UK and Europe.
In 2008 Bacs was responsible for processing more than 5.6 billion UK payments a year, with a total value of £3.85 trillion GBP. Just over three billion payments processed were Direct Debit transactions. These had a combined value of almost £1 trillion (GBP).
At the end of November 2007, the number of transactions processed in one day through Bacs reached a daily processing peak of more than 90.3 million items. The highest peak day for payments in 2008 occurred in November when Bacs debited or credited bank accounts, in a 24 hour period with 88.3 million payments.
The overall volume of payments processed by Bacs grew 2.8% in 2008 with the monetary value of those transactions increasing by 6.8%.
Bacs has been at the heart of the payments industry for over 40 years and is responsible for the schemes behind the clearing and settlement of automated payments in the UK and maintaining the integrity of payment related services. Approximately 115,000 businesses use Bacs services.
Bacs provides two principal electronic payment schemes; Direct Debit and Bacs Direct Credit. These products have increased convenience and provided peace of mind for tens of millions of consumers through the delivery of safe and efficient payments, see below for more details. Bacs also manages the approved software and approved bureau services for direct corporate access to the Faster Payments processing infrastructure, employing expertise and elements from its current solution set.
What is Direct Debit?
A Direct Debit is an instruction from a customer to their bank or building society authorising an organisation to collect varying financial amounts from their account. This can be used to ensure regular, safe and efficient payments of anything from household bills to charitable donations.
Over 3 billion Direct Debit payments are processed by Bacs a year and almost three quarters of British adults are positively disposed towards Direct Debit with 75% now having at least one Direct Debit commitment.
For further information on how to set up a Direct Debit to help keep accounts in order, please contact your bank or building society.
What is Bacs Direct Credit?
Bacs Direct Credit is mainly used for paying wages and salaries - in fact over 90% of the UK workforce is paid via Bacs Direct Credit. In total, Bacs Direct Credit is used for paying four million wages every week and nearly 25 million salaries a month.
In 2008 more than 2.25 billion payments were processed using Bacs Direct Credit, a new record for the payment method by which most people get paid. The total financial value of payments circulated this way was £2.9 trillion (GBP).
What is VocaLink?
VocaLink Limited, is an international payment transaction specialist which provides payment services to banks and corporates. It runs, services and maintains the infrastructure network that processes automated payments on behalf of Bacs. For more information go to: http://www.vocalink.com/
What is the relationship between Bacs and VocaLink?
The history of the two companies is closely intertwined. However, in short, VocaLink owns the infrastructure on which payment schemes operate and Bacs maintains the integrity of the current schemes.
To provide historical context: In 1968, the electronic transfer of funds between banks was introduced by the Inter-Bank Computer Bureau. In 1971 this organisation was renamed Bacs (Bankers Automated Clearing Services); later shortened to Bacs Limited in 1985.
Throughout the eighties and nineties, Bacs invested heavily in new technologies that took full advantage of advances in processing power and software engineering. In 2002, this culminated in a step change in the delivery of Bacs services with the initial introduction of Bacstel-IP – a system which allows users to submit and monitor payments via the internet.
This development was quickly followed by a governance review and an analysis of the payment market which split Bacs into two separate organisations - Bacs Ltd and Bacs Payment Schemes Limited (Bacs). On 12 October 2004, Bacs Ltd became Voca Limited. Today, both organisations work closely together. Subsequently, on 2 July 2007, Voca merged with LINK - the operator of the UK cash machine (ATM) network. The resulting company - VocaLink - provides domestic and international transaction services to banks and corporates.
What is the relationship between Bacs and Faster Payments?
Faster payments is a new payment system which has been developed by the UK banking industry, it enables electronic payments, typically initiated via the internet or phone to be processed in hours. The new service runs alongside the existing Bacs service.
Bacs' involvement is in the delivery and management of the approved software and approved bureau services for direct corporate and bureau access to the Faster Payments processing infrastructure, employing expertise and elements from its current solution set. This allows business users to submit files of payments directly in the Faster Payments Service.