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Bacs welcomes latest move to simplify account opening process for small businesses

2.2.2018

 

​The organisation behind the Current Account Switch Service, Bacs Payment Schemes Limited (Bacs), has welcomed today’s announcement by industry body, UK Finance, that the account opening process has been made simpler for small business owners.

The move means that account providers will now require the same basic set of information from new small business customers looking to open or switch an account.

Working with 18 business bank account providers, UK Finance has created an online guide, including a streamlined checklist, outlining the essential details and documents that most small businesses will need when applying to open an account.

This comes in response to The Competition Markets Authority’s (CMA) investigation into the retail banking market, which identified that the account opening process was a barrier to switching for some small and medium-sized businesses.

With the UK’s flagship Current Account Switch Service having made it simpler than ever for SMEs to switch banking provider, today’s announcement is another positive development in stimulating competition across the market.

Bacs’ Director of Product and Strategy, Anne Pieckielon, said: “As operators of the Current Account Switch Service, we welcome today’s announcement and believe it is another important step towards simplifying the account opening and switching process.

“We know that small business owners are busy enough without the need to deal with further layers of time-consuming admin which, in many cases, could deter some from getting the very best deal from their business account.

“We have worked hard to build a service which makes it simple and stress-free to switch business accounts, and we are pleased to see that another barrier has now been removed. Putting the power back into the hands of small business owners can help stimulate competition and create a market which works for all.”

More information on UK Finance’s new guide can be found here.

For further information contact our press office​.​​​

 

Notes to Editors:

About Bacs:

Bacs has been maintaining the integrity of payment related services since 1968, with responsibility for the schemes behind the clearing and settlement of UK automated payment methods, Direct Debit and Bacs Direct Credit, as well as the provision of managed services for third parties, such as the Cash ISA Transfer Service, and the development, management and subsequent ownership of the Current Account Switch Service.

More than 125 billion transactions have been debited or credited to British bank accounts via Bacs since its inception; in 2017, nearly 6.35 billion UK payments were made this way, while a new record was set on 30 June 2017 with the number of transactions processed by Bacs in a single day reaching a high of 111.7million.

A not-for- profit entity which has maintained carbon neutral status since 2012, Bacs is a membership company limited by Guarantee.

For further information please visit www.bacs.co.uk.

About the Current Account Switch Service:

Key features of the Current Account Switch Service include:

  • The service is free to use.
  • The switch will be completed in seven working days – a substantial improvement on the previous process that could take between 18 and 30 working days.
  • The customer can choose and agree the switch date with their new current account provider.
  • All payments going out (e.g. Direct Debits) and those coming in (e.g. salary) will be moved from the old account to the new account.
  • Payments accidentally made to or requested from the old account will be automatically redirected to the new account for as long as the facility is required.
  • The Current Account Switch Guarantee means that the customer will receive a refund of interest and charges on their old and new current accounts if anything goes wrong with the switch.

As of 1 April 2015, the eligibility criteria for businesses, charities and trusts was extended.  SMEs with a turnover of up to £6.5 million, small charities with an annual income of less than £6.5 million, and small trusts with a net asset value of less than £6.5 million can switch their current account provider using the Current Account Switch Service.

The service was previously available for small businesses with a turnover of 2 million euros (or sterling equivalent); and this extension increases the reach of the service to 99% of the UK’s SME market.

Bacs is responsible for all aspects of the service including working on the recommendations in the Financial Conduct Authority’s ‘Making Current Account Switching Easier’ report, and the findings from the CMA’s market investigation into retail banking.