Bacs corporate information
About Bacs
Founded in 1968, Bacs, the not-for-profit, membership-based industry body is owned by 16 of the leading banks and building societies in the UK, Europe and US. 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 over 40 years.
The Government acknowledges that the Bacs payment system is of critical importance to the UK financial system and has confirmed that it meets the recognition criteria set out in the Banking Act 2009.
Since its inception, over 90 billion transactions have been debited or credited to British bank accounts via Bacs. And in 2011 almost 5.7 billion UK payments were made this way with a total value of £4.3 trillion.
More about Direct Debit
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. This can be used to ensure regular, safe and efficient payments of anything from household bills to charitable donations. Over 3.2 billion Direct Debit payments are processed by Bacs a year and 72 per cent of adults now have at least one Direct Debit commitment.
To learn more about setting up a Direct Debit to help keep your bank account in order, please contact your bank or building society.
More about Bacs Direct Credit
Bacs Direct Credit is mainly used for paying wages and salaries - in fact over 90 per cent 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 2011, more than 2.29 billion payments were processed using Bacs Direct Credit, yet another new record for the payment method.
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: 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.