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FAQs

We have pulled together some commonly asked questions to help your business understand more about Bacs services and schemes.

If you are looking for help with, or an idea of the kind of questions you may face from your customers using our Direct Debit service visit Direct Debit customer FAQs.

The questions are broken down into helpful categories. If your question is not answered here please contact us.

About SHA-2

Below are a number of frequently asked questions to help you through these important changes. Alternatively, click on the following link for the main SHA-2 information page.

What is happening to internet security?
The internet community is adopting a more sophisticated level of internet security – you will hear this referred to as a move away from something called SHA-1 SSL certificates to SHA-2 SSL certificates.

SHA-2 (or SHA 256 to give it its full name) is an improved means of protecting secure internet sites. It stands for Secure Hash Algorithm, and was designed by the National Institute of Standards and Technology (NIST). It is being adopted by all internet providers from 1 January 2017.

This change is driven by the internet community.
What are the changes that Bacs is making?
At the same time as the internet community moves to the new SHA-2 certification, we are withdrawing support for older connection protocols to provide even more protection for the communications pipeline between the Payment Services Website (PSW), and our service users. We now only support TLS 1.1 and 1.2.

This change is driven by the payments industry.
What is TLS 1.1 / 1.2?
TLS stands for Transport Layer Security, and it is a cryptographic protocol which secures the information pipeline between Bacs and your organisation. TLS is newer and more advanced than the SSL (Secure Sockets Layer) protocol which precedes it. 1.1 and 1.2 are simply the version numbers of the protocol.
I am having difficulty submitting a file – what do I do?
You must use payment software that is compatible with SHA-256 SSL and TLS1.1/1.2. If you are experiencing difficulty submitting payment files it may be that your software needs to be updated or configured correctly. You must contact your Software Solution Provider immediately as they are your first point of contact.
I am unable to access Payment Services Website – what do I do?
Your connection to the Payment Services Website now uses SHA-256 SSL and only allows the more secure TLS1.1/1.2 protocols. If you cannot access the website then first check with your own IT provider that you are using the correct internet browser and operating system specifications.

If you still experience difficulty please contact the Bacs Service Desk on 0370 165 0018.
I don’t know if I’m a direct submitter or an indirect submitter – how do I find out?
A direct submitter creates a file to make and / or collect payments which are sent directly to Bacs. These files are submitted using Bacs approved software and smartcard technology to access our services via Bacstel-IP. You may also use the Payment Services Website (PSW) to access reports and advices.. There is more information here.

As an indirect submitter, you may create your own payment file or it may be created for you by the bank or commercial bureau which submits files to Bacs on your behalf. You may use the Payment Services Website (PSW) to access your reports and advices, or your bank or bureau may do this for you. Find out more here.
Which browser will I need to install?
You should check with your IT provider for the correct browser which will support SHA-2 SSL certification and TLS 1.1 / 1.2. The right browser choice will be affected by your existing operating system, which may also need to be upgraded, as well as any changes to security settings which are guided by your company security policies.
Click here for a guidance table on which browsers support SHA-2 SSL certificates and TLS 1.1 / 1.2.
Why does there have to be a change?
The internet community is moving away from the existing security certificates, called SHA-1, and replacing these with new certificates, called SHA-2. As a result, all secure sites will also need to be updated to accommodate this change; access to these sites will be limited to those using an appropriate browser and operating system.

As this is already happening, we have chosen to upgrade our own security around the communications pipeline between Bacstel IP / the Payment Services Website (PSW) and you, the service user, at the same time.
I heard SHA-3 is ready. Can / should I simply upgrade to this level to avoid future changes?
No, you should upgrade to SHA-2. There is no industry-wide adoption of and support for SHA-3 right now. In addition, unlike SHA-1 which is being phased out and replaced by SHA-2, SHA-3 has been developed to be complementary to SHA-2 and will not be a replacement.

Should you want to know more about SHA-3, information is available from the National Institute of Standards and Technology (NIST).
When will I get a new smartcard?
Smartcards and signing solutions will be replaced by your bank automatically at the appropriate time. You will need to install your new signing solution, so please liaise with your IT provider accordingly.
What happens if I don’t get one?
Your smartcard will be replaced by your bank automatically. If there is an error and you don’t receive one by 2020, you should refer to your sponsoring bank.
What should I do with my old smartcard?
Your sponsoring bank will let you know what to do.
Can I upgrade my smartcard now?
No, your smartcard will be replaced at the appropriate time. Your existing card will continue to work until that point.
I have a password to access these services, not a smartcard – will I be affected?
This is what is called ASM access. You will be prompted to change your password at the appropriate time. The minimum length of new passwords will increase to eight characters
I have a different question. Where can I get help?
Contact us or alternatively, click on the following link for the main SHA-2 information page.

AUDDIS

How will we know if a Direct Debit Instruction (DDI) has been accepted?
You will receive notification of any rejected Direct Debit Instructions (DDIs) within five working days of sending the Direct Debit Instruction to the paying bank advising the reason for return.
Can any organisation apply to use AUDDIS?
Yes. AUDDIS is primarily aimed at service users collecting high volumes of low value payments, but any collecting organisation can apply to use the service. However, it isn't suitable for all organisations and various risks must be considered; your bank will help with this issue. Acceptance is controlled by the banking industry, with potential service users being vetted for compliance to service standards. Once your bank is satisfied that you meet the criteria required to join, you will be accepted.
Isn't storing and retrieving Direct Debit Instructions (DDIs) a burden for service users?
The benefits of not having to send paper Direct Debit Instructions (DDIs) to banks far outweigh any disadvantages. Besides, paperwork like contracts and agreements already have to be stored, so storing Direct Debit Instructions as well shouldn't cause problems.
Isn't there a risk of fraud if customers' signatures aren't checked by banks?
It's extremely unlikely because you have responsibility for verifying your customers' identities via methods such as credit reference checks, cross-referencing with the electoral register or your own historical customer records. Furthermore, before joining AUDDIS, you must satisfy your bank about the checking procedures you intend to adopt.
As the banks no longer receive paper Direct Debit Instructions (DDIs), will their design rules be relaxed?
No, because these rules are principally for the benefit of the customer to make it easy to complete and ensure all the details necessary to set up a Direct Debit Instruction (DDI) are obtained. You are still required to obtain approval of your Direct Debit Instruction design from your bank prior to use.
What's different about a Direct Debit Instruction (DDI) set up by AUDDIS?
There's only one major difference with AUDDIS - the signed Direct Debit Instruction (DDI) is retained by you, not the paying bank. You simply enter your customers' details into your own system and send them electronically - via Bacs - to the customer's bank.
Must we convert all our current Direct Debit Instructions (DDIs) to AUDDIS?
Not if you don't want to. Just some Direct Debit Instructions (DDIs) may be converted to the service. However, separate Service User Numbers (SUNs) must be used for AUDDIS and non-AUDDIS Direct Debit Instructions.
When would banks request copies of Direct Debit Instructions (DDIs)?
Most customer queries can easily be resolved by their bank or the service user without recourse to the Direct Debit Instruction (DDI) itself. In general, banks only need to request a Direct Debit Instruction when a customer disputes signing it.
Is acceptance of a Direct Debit Instruction (DDI) a guarantee of payment?
No, because either the customer or bank may decide to cancel the Instruction before collection of the first payment. Besides, there may be insufficient funds in the customer's account when payment is due.
Is it permissible to send an image copy of a Direct Debit Instruction (DDI)?
Yes. Fax or photocopies, digital or microfiche images are all acceptable, as long as the customer's signature is clearly visible.
How can the account numbers that customers write on their Direct Debit Instructions (DDIs) be validated?
You are advised to carry out modulus checking within your systems, which will identify invalid bank sort code and account number combinations for most banks. If this isn't done, AUDDIS Instructions which fail the modulus check performed by the Bacs service, are returned to you and will not be passed to the paying bank. Modulus checking does not verify that the account details belong to the payer.
How do we know whether a customer is authorised to sign on a particular account?
Sometimes it's difficult to be certain because you won't be aware of signing instructions applicable to different bank accounts, such as joint accounts or business accounts. However, your business relationship with individual customers will normally allow you to establish valid signatories. If Instructions are frequently accepted from business customers, you may wish to consider taking additional precautions regarding identity checking.
May customers be told about AUDDIS?
Yes, if a customer asks about AUDDIS you are free to explain the benefits and tell them how it works. However research has shown that most people have little interest in how Direct Debits are processed as long as their accounts are debited correctly.
Does AUDDIS affect the rules governing advance notice?
No. The rules covering advance notice to customers before collection of a first payment - or variations to amount, date or frequency - are unchanged. The default period in the absence of any other agreement is a minimum of 10 working days plus postal time.
How long should a Direct Debit Instruction (DDI) signed by a customer be kept?
This is a business decision for your organisation. You must bear in mind that, if you're not able to produce a Direct Debit Instruction (DDI) on a bank's request, you may be requested to refund money under the terms of the indemnity.
Are Direct Debit Instructions (DDIs) relating to future payment collections accepted by the banks?
Yes. All Direct Debit Instructions (DDIs) should be submitted to the paying bank within 10 working days of the customer signing the Direct Debit Instruction, even if the first payment will not be collected for some time. Paying banks hold details of DDIs on file for a minimum of 13 months from receipt or last payment. In exceptional circumstances, you may apply to your bank for an extended dormancy period when applying to join AUDDIS. If accepted your bank will advise the paying banks.
What happens if a bank needs to see a copy of a customer's Direct Debit Instruction (DDI)?
You must provide a copy within seven working days from the date of the request.
What happens if a copy of a customer's Direct Debit Instruction (DDI) isn't / cannot be provided within these timescales?
You may be liable for any Direct Debit collected under the Direct Debit Instruction (DDI).
Who's responsible if a payment is made against a fraudulent signature?
You are liable. However, under the terms of the Direct Debit Guarantee, the paying bank must refund the customer immediately, and then reclaim the amount refunded from you through an indemnity claim.

Bacs Direct Credit

What is a Bacs Direct Credit?
Bacs Direct Credit is a simple, secure and reliable service, which enables large and small organisations to make payments by electronic transfer directly into your bank or building society accounts.
What are the benefits of Bacs Direct Credit?
'Cleared' funds on arrival - unlike cheques funds paid by Bacs Direct Credit can be used on the day they arrive.
What type of payments can Bacs Direct Credit be used for?
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. However, Bacs Direct Credit can be used for a wide variety of other applications. Over 150,000 organisations use Bacs Direct Credit for supplier payments, pensions, employee expenses, insurance settlements, dividends and refunds. The Department for Work and Pensions pay the majority of their benefits this way.
Who controls Bacs Direct Credit payments?
Control of a Bacs Direct Credit will typically rest with a payer’s bank. A bank or banking provider can authorise a company to make Bacs Direct Credit payments and is responsible for overseeing the operation of Bacs Direct Credits.
What is the difference between direct payment and Bacs Direct Credit?
Nothing. Direct payment is the term used by the Department for Work and Pensions for making Bacs Direct Credit payments.
How do I go about setting up a Bacs Direct Credit?
Your bank will offer facilities as part of your general account to credit another account. You can credit another account by using either your personal or business banking service. As a rule, you need the name of the payee, the name of their bank, the payee’s bank account number and sort code. It is vital that you double check the sort code and account number before sending a payment: payments are processed only using these numbers. You will also need to provide the same details for the account to be debited. Typically this will be your account, or an account from where you are authorised to make a payment, in the case of a joint account, for example.
How do I stop a Bacs Direct Credit payment?
To arrange this you must contact the branch where you maintain your account no later than one bank working day before the payment is due to be credited. They will advise you if they can action your request.

When contacting the branch you will need to give them the beneficiary's sort code, account number, the amount of payment and most importantly the crediting date.

Your bank will contact the beneficiary bank to action your instructions. This is known as recalling the payment.

It is advisable to make sure the payment has been recalled by checking your bank statement. Your account will be re-credited within a few days.

If you discover you have made a wrong payment after the recall deadline, you will need to contact the beneficiary direct.
What do I do if something goes wrong with a Bacs Direct Credit?
In the unlikely event that a payment doesn't arrive into your account it may be because it has the wrong account details. First find out how the organisation sent it e.g. via Bacs. Also ask them for the sort code and account number they quoted on the payment, and the date they requested it to be credited to your account. Next contact your bank to ensure that they haven’t received the payment. They may require additional information, including details of the remitting organisation and their sort code and account number. If your bank is still unable to locate the payment you should contact the remitting organisation as soon as possible so they can initiate an investigation.
How can I get my suppliers to pay me direct?
Just ask! Alternatively, you could write to all your suppliers and include details on all your invoices
What information do I need in order to pay someone by Bacs Direct Credit?
The minimum information you require is their bank sort code, account number and destination account name. It is vital that you double check the sort code and account number before sending a payment: payments are processed only using these numbers. You could ask to see a copy of a paying in slip, cheque book, or bank statement, so that you can verify these details.
I already have a service user number for paying wages by Bacs Direct Credit. Can I use the same service user number to make supplier payments?
It's best to get a separate number from your sponsoring bank. This gives you better control of your payments and enables you to differentiate between separate applications, for example, salary and supplier payments, and nominate a separate addressee to whom reports can be directed.
How do I extract a payment file?
Where many of the payments are incorrect, it may be better to cancel all the payments by asking your bank to withdraw the file from the Bacs processing run.

The request must take place before 10.30pm on day one of the processing cycle (input day).

When requesting a file extraction, the bank will require your service user number, processing date and the total number and value of all payments.

You will receive confirmation that the file has been extracted. This will be sent by first class post the day the request is made. Check the details to ensure that the correct action was taken
How do I control the total value of payments made to our suppliers each month?
Set a realistic monthly account limit with your bank which should be reviewed at regular intervals.

Bacs Direct Credit service user’s role in the Current Account Switch Service

What is the Current Account Switch Service?
The Current Account Switch Service (CASS) has been developed by the banking industry to make switching a current account from one bank or building society to another, simpler, reliable and hassle-free.
How does the Current Account Switch Service differ from the previous switching processes?
Previous switching services provided a more limited proposition than the Current Account Switch Service which provides a consistent service to customers. It is faster, once the new account is open and a switch date agreed, the transfer will be completed in seven working days. The account holder also benefits from a Guarantee that provides peace of mind. It also includes the central redirection of automated payments including Direct Debits and Bacs Direct Credits.

As well as the Current Account Switch Service, customers can, by exception, request a partial account switch. This does not include a Guarantee or a redirection facility, but enables the account holder to maintain two accounts.
Why has the banking industry introduced the redirection facility as part of the service?
To provide peace of mind for the account holder in the event that payments are accidentally sent to the old account.
What is Advice of Wrong Account for Credit Service (AWACS) and what is the purpose of AWACS advices?
Advice of Wrong Account for Credit Service (AWACS) is a messaging service by which banks advise service users such as yourself of amendments to your customers bank account details. The advices are available to you in the form of reports and you are required to action these advices to ensure that any future payments to your customer are submitted correctly. AWACS advices that you receive may relate to changes to your customers account details that do not relate to the Current Account Switch service.
If payments are being redirected am I still required to act on AWACS advices?
You must still take immediate action when you receive an AWACS advice notifying you of changed payment details to ensure your customer is not adversely impacted in the future.
What if I have already created my payment file when I receive an AWACS advice?
You can let the payment continue to the old bank, as the redirection service will in most cases result in the payment reaching the new bank. Only the full Current Account Switch Service offers the redirection service. Customers may have requested a partial account switch which does no include this service. You must update your records as per the AWACS advice in time so further payments are directed to the new account details.
Are there circumstances when the payment would not be redirected?
In most cases the central redirection service will result in the payment reaching the new bank however the central redirection service applies to full account switches only. Payments are not redirected where a customer chooses a partial switch. In such cases a payment addressed to the old bank may be returned via the Automated Return of Unapplied Credits Service (ARUCS).
Where can I obtain more information about the Current Account Switch Service?
Visit Maintaining payment records for further information or contact your sponsoring bank who will be able to answer any questions you may have.

Bacstel-IP functionality

Why is account validation (modulus checking) only applied at submission time? If a single item fails account validation, will a business have to stop the entire submission?
The Bacstel-IP technical specification mandates that, at a minimum, account validation must take place before submission of a file. Ideally account validation should take place at the earliest point in the payee / payer setup process when the account details are entered into the payment application.

If a single item fails, you will have the option of stopping the file and sorting out the problem there and then, or allow the file to be processed after which you will receive an unapplied credit / unpaid debit report.

Account validation before submission is a failsafe requirement to apply quality standards, where validation doesn't happen earlier in the process.

Account validation improves the quality of payment data, preventing known incorrect details being used that would result in a rejection. Any errors identified should be corrected prior to submission to Bacs.

All Bacs approved software (for Bacstel-IP) must utilise the latest version of the Industry Sorting Code Directory (ISCD) to ensure this.
What is the procedure if there is a failure in a transmission or a submission is rejected by Bacstel - IP? Does Bacstel-IP have the ability to restart a submission at the point of failure or do businesses have to restart the process from the beginning?
Bacstel-IP and the solution supplier software are designed to work together to handle transmission problems efficiently and in most cases automatically. This means that the system can cope with breaks in transmission and does not need to re-transmit large amounts of data if a transmission break occurs.

When a transmission is complete, the customer receives an acknowledgement from Bacstel-IP. This indicates that the data has been accepted or rejected. Clearly if the data is invalid for any reason it is desirable to reject and inform the customer as soon as possible.
Once a file has been submitted, what processing acknowledgements do businesses get from Bacstel-IP?
Bacstel-IP monitors the receipt of data from a user and at the end of a submission the validation and security processes determine that the submission is complete and integrity of the files maintained. Bacstel-IP provides an appropriate acknowledgement back to the user's Bacstel-IP package to present to the operator. On input day, the submission undergoes the full item validation and the input report is made available electronically to the user to check via Bacstel-IP. This will enable any errors detected at Bacs to be corrected and re-submitted.
What reports are available online and is access to each type restricted to individual users?
Reports can be accessed by report group:
- Input (arrival, submission, input)
- Payment advice (ARUDD, ARUCS)
- Message advice (ADDACS, AWACS).
An email notification advising of the availability of a new report can be issued to a maximum of three contact points for each report group.
What file formats are reports available in?
Reports from Bacstel-IP are presented in Extensible HTML - readable, formatted text on screen and can be printed as per any standard web page. An XML format option is also available to receive the information as a stream of data that can be input directly to an application to process the data.
Could input reports be delivered directly by email?
No, an email notification is sent to advise which report is ready for collection.
Submissions are signed when transmitted to Bacstel-IP. Why does Bacstel-IP support the signing of individual files as well?
The signing of individual files is intended to support your internal security or authorisation policy. For example a financial director or controller may be required to sign a file before that file is submitted by another department, and is signed as a submission as part of the submission process.
For bureau users, can both the user and the bureau collect reports?
Yes, the user can collect their own reports or if their bureau offers this service the bureau can collect reports on the customer’s behalf.
How long will reports be available from Bacstel-IP for customers to access?
Reports will be held on the Bacstel-IP web server for a period of 26 working days. If necessary, the sponsoring bank customer service groups have access to archived records.

Bacstel-IP general

What is Bacstel-IP?
Bacstel-IP is the platform for the future of automated payments.

Moving away from traditional telecoms based systems, Bacstel-IP is a multi-layered, highly advanced, online submission channel and the largest Public Key Infrastructure (PKI) community in the world. Providing organisations with a faster, more secure service plus the ability to track and view payment files at any time and from anywhere, Bacstel-IP offers a reliable and cost-effective way of accessing Bacs payment services.
What are the benefits for businesses and customers?
Bacstel-IP has a range of benefits to businesses: the ability to track payment status information online, keeping the businesses own records accurate and up to date in real time, and electronic reporting online. There is also automated receipt of payment and faster payment confirmation.

It also adopts heightened levels of security in payment submissions through the use of Public Key Infrastructure (PKI) and Public Key Cryptography (PKC) to provide industry strength security.

Bacstel-IP implementation

Where can I get Bacstel-IP software to access Bacs?
The Bacstel-IP software is only available from suppliers of Bacs approved software. The approval service ensures that all Bacstel-IP software and customer service standards are maintained at the highest level. Only packages that pass the rigorous testing and approval procedures set by Bacs will be able to gain access to Bacstel-IP.

View the full list of Bacs approved software.
What is the Bacs approved software service?
The Bacs approved software service is a programme for software developers (solution suppliers) who wish to develop a Bacstel-IP software solution.

The approval service ensures that the quality of Bacstel-IP software and customer service standards are maintained to a high level. Only packages that pass the rigorous testing and approval procedures set by Bacs will be able to gain access to Bacstel-IP.

The testing approval procedures include: ensuring easy to use and secure connections, validation routines to check for incorrect bank account data and, most importantly, assuring compliance to the Bacstel-IP interface which requires digital signing and SSL.
How much does a Bacstel-IP solution cost?
The cost of a Bacstel-IP solution will depend on the type and configuration of the system you want to submit payments. Solution suppliers will establish their own charges for packages normally dependent on the range of features and options chosen. The overall costs of a solution will also need to take into account any requirement to upgrade the system hardware or operating system to support the required technical specification and any costs associated with the new security solution. Large scale implementations may require project management and the involvement of a customer’s IT department depending on their IT development policy and technical requirements.
Do businesses have the option of developing their own Bacstel-IP interface?
Yes, businesses that would prefer to write their own Bacstel-IP solution may do so but must conform to the technical and quality specifications of Bacstel-IP and will be subject to the conditions and testing mandated under the Bacs Approved Software Service (BASS).

If a business would like to receive more information, they should either contact their sponsoring bank or Contact us.

Businesses will be required to enter a non disclosure agreement with Bacs before receiving further details concerning the Bacs Approved Software Service (BASS) and the technical specification concerning the Bacstel-IP interface.
How long does a standard implementation take?
A simple stand alone PC based implementation will typically take 6-8 weeks. Network, mainframe or Hardware Security Module (HSM) solutions will take longer. Customers should talk to suppliers of Bacs approved software for a more accurate estimate based on their individual circumstances.
Once a business is live on Bacstel-IP, who should they contact if they encounter a problem?
This depends on the type of query:
- General Bacs processing query - Contact us
- Connectivity problem - your supplier of Bacs approved software
- Log in / password issues - your sponsoring bank

Bacstel-IP security

What are the different security methods that Bacs uses?
There are two security method types:
- PKI (digital certificate and signature) credentials, allow the user to sign and send submissions, collect and view reports and maintain reference data
- Alternative Security Method (ASM) allows the user to collect reports as well as view and update certain contact details via the Bacs Payment Services Website (PSW), which is accessed simply via a contact ID and password
Sponsoring banks will set up each user and contact points on Bacstel-IP. They will assign relevant access levels for each contact point in agreement with the user's primary security contacts (PSCs).
What are the different types of contacts on Bacstel-IP?
Contacts are set up on Bacstel-IP and are given privileges allowing them to carry out certain functions.

There are two contact types:
- Primary security contact (PSC): Each service user must have two primary security contacts. A primary security contact can set up additional contacts and determine the privileges of those additional contacts. They can also be given the privilege to maintain certain service user reference data
- Additional contact (AC): A service user can have as many additional contacts as needed. An additional contact is granted privileges to carry out certain functions on behalf of the service user.
Privileges can be amended by a primary security contact or sponsoring bank customer service group (CSG).
What type of port does the smartcard reader require for example serial, parallel or USB?
Smartcards can be connected via serial, PCMCIA and USB interfaces. Customers are advised to speak to their sponsoring bank regarding the various types of smartcard readers and signing software available to them.
What is the difference between a smartcard and a Hardware Security Module (HSM) solution?
The smartcard based security process requires an operator to insert the card into a reader and key in a PIN each time a digital signature is required and it is therefore best suited to a PC or other interactive based systems.

The Hardware Security Module (HSM) solution utilises a piece of hardware that connects to or goes inside a computer system. It is used to hold secret keys and other security related material. It can be accessed in a secure and controlled way to produce digital signatures. HSMs come with different levels of security to prevent unauthorised access to the secret material. It allows security process actions to be more automated and therefore it is typically used in a mainframe or server environment for dark room or unattended operation or where a remote and / or secure computer environment is required and physical access is limited.
What is the cost of a Hardware Security Module (HSM) solution?
Solution suppliers establish charges for different versions of a package required to support either a smartcard and / or Hardware Security Module (HSM) based environment.
Are there any charges for the digital certificate, smartcards and readers? Are there usage charges as well as set up costs?
Smartcard readers and signing software are usually supplied by the solution supplier and are incorporated into the cost of the solution. However some sponsoring banks may also issue the smartcard readers and signing software as well as issuing the actual smartcard. Any charges are subject to each bank's terms and conditions.
Can a single smartcard be used for multiple user numbers from different sponsoring banks?
Currently, one smartcard can be used for multiple user numbers but a separate smartcard per sponsoring bank will be required. One card reader can read all cards. Bacs has developed interoperability standards to facilitate this.

Smartcards are generally issued to individual users within an organisation, and for security purposes, they should not be shared amongst users.

PKI credentials issued from one sponsoring bank can only be used to secure Bacstel-IP communications relating to a service user with that bank.

Each user or bureau number must have a minimum of two registered primary security contacts (PSCs). Since the same primary security contact can be assigned to many user or bureau numbers with the same sponsorship, then the minimum number continues to be two.
What lifespan do smartcards have? For example, do credit cards have an expiry date?
Smartcards may have a lifespan of up to 5 years. Sponsoring banks will usually issue their smartcards and digital certificates with a lifespan of three years.
Is there a risk when accessing Bacstel-IP through an unprotected internet connection for example if a user is accessing from home?
No, there is no risk, as once a user has been verified by Bacstel-IP, a Secure Socket Layer (SSL) session is opened, which provides a secure and encrypted session between the PC and Bacs. This will provide a secure encrypted session for ASM (password) access to Bacs for the purpose of viewing data or downloading reports.
What contingency do businesses need to take, if they are supplied with only one card reader?
It is advisable for businesses to have two card readers as a contingency. You should discuss this with your sponsoring bank. Most sponsoring banks will also offer an in-house bureau facility. Solution suppliers may also provide such a bureau facility, as do many commercial bureaux.

Please note that there is no emergency password facility with Bacstel-IP, customers are advised to have contingency in both smartcards and card readers.

Bacstel-IP technical information

Why is Bacs using internet based technology?
Internet Protocol (IP) is a set of computer technologies that enable many computers to exchange information reliably and efficiently, wherever they may be, worldwide.

IP is in very widespread use and has become the standard for data networking. IP is the foundation of the global public internet and is also the dominant technology used by organisations sharing private networks.

Internet technologies have reached a critical mass and universal level of acceptance amongst the IT industry and its users. For electronic communication virtually all research and development effort over the last decade has been in this area. This makes internet technologies unquestionably the most versatile and cost effective way for businesses, banks and consumers to exchange information.
What connection methods are supported by Bacstel-IP?
Bacstel-IP offers the ability to submit payments and collect reports across two connectivity types; the internet, and Fixed Extranet Connect.
If a business uses one of the extranet connections, can they utilise the internet as a backup method?
Yes. The extranet utilises the same technology and protocols as used for internet connections and therefore the internet can potentially be used as a backup. Implementation, configuration and usage of backup links will be dependent on your individual environment and therefore need to be undertaken in conjunction with a supplier of Bacs approved software.
What connection speeds are available for internet connections?
Internet connections are dependent on the user's own connection to their ISP for example dial up, ISDN, broadband and so on.

Biller Update Service

What is the Biller Update Service (BUS)?
The Biller Update Service (BUS) is a service designed by Payments UK to deliver a managed and consistent process for capturing, validating and disseminating biller information to banks and organisations that are members of the payment schemes or Payments UK.
Who manages the service?
Bacs operates the Biller Update Service (BUS) on behalf of Payments UK.
What are the key features of the service?
The service provides a central and coordinated process for managing changes to biller information and a central process to validate the information with the submitting bank before publication.
What are the key benefits of the service?
- Updates will have been validated with the submitting organisation before being published
- Information provided to users will be consistent
- Users can update their own biller lists to improve the quality and accuracy of the information they provide to customers.
Who can use the service?
Any member of one of the payment schemes or a member of Payments UK may use the service.

Only banks with a commercial relationship with a biller can submit a change via the service.
If I want to join the service what do I need to do?
To register your interest in using the service contact Bacs.
Will the service correct existing biller information on banks customer biller lists?
No, the service will only be used to make changes to information with effect from its launch on 28 June 2013.
Will all billers use the service to provide information to receiving organisations?
No, not all banks and their billers will provide updates via the service. For example, some billers may not receive enough payments via telephone or internet banking channels to warrant providing the information to customers.

Cash ISA Transfer Service

Why has the Cash ISA Transfer Service been introduced?
The Cash ISA Transfer Service has been developed in response to the changing regulatory landscape relating to the speed and ease of the transfer of Cash ISAs.
What is the Cash ISA Transfer Service?
The Cash ISA Transfer Service is a mechanism that enables the ceding and acquiring ISA provider to exchange a series of automated messages, ahead of the transfer of funds, replacing the paper based process.
Why do I need to use the Transfer Service?
For Cash ISA providers the Transfer Service will result in an increase in the quality and ease of the transfer of Cash ISAs due to the automation and standardisation of information flows between ISA providers. This will ultimately lead to an improved customer experience.
How does it work?
The process works very much as the paper based process, because the rules and requirements haven't changed, but the paper exchanges have been replaced with automated messaging, where both ISA providers use the service.
What products can be transferred using the service?
The Cash ISA Transfer Service applies to the following:
- An adult Cash ISA transferring to another adult Cash ISA
- An adult Cash ISA transferring to a Stocks & Shares ISA
- A junior Cash ISA transferring to another junior Cash ISA
- A junior Cash ISA transferring to a junior Stocks & Shares ISA
All "Cash" ISAs are included - instant access, fixed, notice, structured products, etc.
What if I want to transfer the proceeds of a Cash ISA to a Stocks & Shares ISA?
Stocks & Shares ISA providers can use the Cash ISA Transfer Service to effect these transfers if they wish to do so.
How do I access the service?
There are a number of ways (channels) in which you can access the service although there are a few steps to work through before you are able to participate in the service.

These include:
- Completing the application form which can be found on the Join channel of this website
- Following acceptance by Bacs you will be provided with access to documentation that explains in more detail how the service works
- Once you have confirmed that you wish to proceed with your application you will be required to sign a participation agreement. This is a legal agreement between your organisation and Bacs
- You will also need to make arrangements with a Bacs member bank to obtain the technology enabling you to submit and receive messages in a secure and safe manner. A list of Bacs member banks can be found on the About channel of this website. If your organisation is already a Bacs service user you will probably be familiar with the security mechanisms (smartcards) your organisation currently uses. If your organisation does not currently use Bacs, rest assured that the technology is simple to use
- You will be expected to complete some testing to ensure that you are able to submit and receive messages. This step will also enable you to hone your internal processes to build on the messaging capability
- You will also need to ensure that you can send and receive funds transfers via automated means, as the use of cheques for balance transfers will not be permitted for any transfers made using the service.
What information is available from the Transfer Service?
A number of reports are available that enable providers to:
- Track the progress of individual Cash ISA transfers
- Monitor the volumes of Cash ISA transfers "in" and "out"
- Provide Management Information (MI) on the time taken to complete transfers.
How often are the reports available?
The availability of reports varies depending on the subject matter of the report. Some are available daily, some monthly, and others on request. The system will be configurable so you can elect to receive email reminders when reports become available.
What changes will I need to make to my systems to use the Transfer Service?
It is difficult to provide specific advice on this. As a minimum you will need to be able to access the internet and use software that supports card readers. If you are using the website application this may very well be all that you need. However, you may also decide to review and change your internal procedures to best fit with the automated process that will take place between providers.
Is it mandatory to use the service?
It is mandatory for all Bacs member banks who offer a Cash ISA product, which accounts for 85% of the transfer volume of Cash ISAs, but it is not mandatory for all providers.
If I don't use the service and other Cash ISA providers do, how will it affect my dealings with them?
In order to use the service to complete a transfer, both providers must be using the service. If one provider does not use the service, then the transfer will have to be processed via the manual process.
Is the service available now?
Yes, the Cash ISA Transfer Service was launched in October 2012.
How much will it cost to use the service?
We cannot be specific on this as there are a number of elements to be considered:
- There is not an application fee and subject to using the Bacs standard testing service there are no direct costs associated with testing
- You will be required to obtain technology (smartcards) from a Bacs member bank to enable you to access the service safely and securely. Provision of such technology is a competitive issue and is therefore something for you to discuss with a Bacs member bank
- You will be charged a transaction fee as an acquiring provider for each completed transfer. Whilst this fee is the same for all acquiring providers, it may vary from time to time. Details will be provided by Bacs during the application process.
How do I go about starting to use the service?
There are a few steps to work through before you are able to start using the service. These include:
- Completing the application form which can be found on the Join channel of this website
- Following acceptance by Bacs you will be provided with access to documentation that explains in more detail how the service works
- Once you have confirmed that you wish to proceed with your application you will be required to sign a participation agreement. This is a legal agreement between your organisation and Bacs
- You will also need to make arrangements with a Bacs member bank to obtain the technology enabling you to submit and receive messages in a secure and safe manner. A list of Bacs member banks can be found on the About channel of this website. If your organisation is already a Bacs service user you will probably be familiar with the security mechanisms (smartcards) your organisation currently uses. If your organisation does not currently use Bacs, rest assured that the technology is simple to use
- You will be expected to complete some testing to ensure you are able to send and receive messages. This step will also enable you to hone your internal processes to build on the messaging capability
- You will also need to ensure that you can send and receive funds transfers via automated means, as the use of cheques for balance transfers will not be permitted for any transfers made using the service.
Do the rules for Cash ISAs change?
No, the rules agreed between the industry and the regulators have not been changed. The Cash ISA Transfer Service merely automates the messaging that exists in paper form between ISA providers.
If the process is automated, how do I ensure that a transfer relates to the correct customer?
Existing processes regarding customer verification, eg, KYC checks must still be completed. The initial message between the two ISA providers will contain information to enable the existing provider to verify its customer.
How quickly can I expect a transfer to take?
The Service Level Agreements (SLAs) for the Cash ISA Transfer Service are agreed between the industry and the regulators.
How long will it take for me to be able to start using the service?
Whilst it is difficult to be specific as it may vary between providers we would envisage several weeks elapsing between the submission of the application form and the commencement of testing. To help you work through the various activities Bacs will provide you with access to a take-on process document
Who do I contact for further help or information?
This will depend on what stage you have reached and also the nature of your query. During the application process queries will generally be dealt with by Bacs. If however you need further information relating to the technology to safely and securely access the service provided by a Bacs member bank then it may be best to speak to them directly.

Direct Debit service user’s role in the Current Account Switch Service

What is the Current Account Switch Service?
The Current Account Switch Service (CASS) has been developed by the banking industry to make switching a current account from one bank or building society to another, simpler, reliable and hassle-free.
How does the Current Account Switch Service differ from the previous switching process?
Previous switching services provided a more limited proposition whereas the Current Account Switch Service provides a complete and consistent service to customers.

It is faster, once the new account is open and a switch date agreed, the transfer will be completed in seven working days. The account holder also benefits from a Guarantee that provides peace of mind. It also includes the central redirection of automated payments including Direct Debits and Bacs Direct Credits.

As well as the Current Account Switch Service, customers can, by exception, request a partial account switch. This does not include a Guarantee or a redirection facility, but enables the account holder to maintain two accounts.
Why has the banking industry introduced the redirection facility as part of the service?
To provide peace of mind for the account holder in the event that payments are accidentally requested from the old account.
What is the Automated Direct Debit Amendment and Cancellation Service (ADDACS) and what is the purpose of ADDACS advices?
The Automated Direct Debit Amendment and Cancellation Service (ADDACS) is a messaging service by which banks advise service users such as yourselves of amendments to your customers bank account details. The advices are available to you in the form of reports and you are required to action these advices to ensure that any future payment collections to your customers are submitted correctly. ADDACS advices that you receive may relate to changes to your customers account details that do not relate to the Current Account Switch Service.
If collections are being redirected am I still required to act on ADDACS advices?
You must still take action within three working days when you receive an ADDACS advice notifying you of changed collection details to ensure your customer is not adversely impacted in the future or your own cashflow does not suffer as a result of a failed collection.
What if I have already created my collection file when I receive an ADDACS reason code 3 advice?
You are encouraged to let the collection continue to the old bank, as in most cases the central redirection service will result in the collection reaching the new bank. You must however update your records as per the ADDACS advice in time so further collections are directed to the new account details.
If I receive an ADDACS reason code 3 advice close to the customer's next collection date should I suspend the collection and contact the customer to ask them to effect the payment in another way?
You are encouraged to let the collection continue to the old bank as in most cases the central redirection service will result in the collection reaching the new bank. You must however update your records as per the ADDACS advice in time so further collections are directed to the new account details.
I have acted on an ADDACS reason code 3 advice and submitted the 0N but it has been returned with reason code l (Payer reference is not unique)?
Should this unlikely scenario occur, contact your sponsoring bank who will be able to resolve this on your behalf.
Are there circumstances when the collection would not be redirected?
In most cases the central redirection service will result in the collection reaching the new bank, however the central redirection service applies to full account switches only. Direct Debit collections are not redirected where a customer chooses a partial switch. In such cases a Direct Debit collection addressed to the old bank will be returned unpaid reason code 3 (Account transferred to a new bank / building society).
Where can I obtain more information about the Current Account Switch Service?
The Service User’s Guide and Rules to the Direct Debit Scheme provides details of the service or information can be found at Maintaining payment records. Your sponsoring bank will also be able to answer any questions you may have.

Late payments

What can I do to help prevent late payments?
Explain to companies that you actively encourage the use of automated payments. It’s a great idea to put your bank sort code and account number on all your invoices with the bold message ‘Pay Me Direct’. Consider credit-checking trading partners – if you knew one was about to go bust would you allow them 30 days credit? Consider offering discounts for prompt or early payers to encourage your payments to keep flowing.
A customer is refusing to pay. What should I do?
Many business relationships have a strength and history that means problems can be sorted out amicably, however if a customer refuses to pay, it’s important to establish why. If they are disputing a payment, the onus is on you to resolve the dispute. First, write to the person who you have the commercial contract with, to acknowledge the outstanding payment. If the customer ignores your letter (which you should follow up with a phone call), and has not formally disputed your invoice and has no justifiable reason to withhold payment, then you could appoint a third party to pursue the debt. You can also consider recovering the debt through the County Court. If you opt to go through the County Court and the debtor ignores the claim, you could think about applying for a judgement against the company.
Where can I get more details about late payment legislation?
The Better Payment Practice Group provides essential information and facts on late payment legislation. Visit www.payontime.co.uk to learn more.
How do I go about negotiating suitable payment terms with suppliers?
The Better Payment Practice Group provides useful information and tips that will help you with negotiating payment terms. Check them out at www.payontime.co.uk/legislation.

Paperless Direct Debit

Am I eligible for paperless Direct Debit?
If you are already using AUDDIS, yes. Just apply to your bank, who will assess your application and establish your ability to meet the paperless Direct Debit criteria. If you are not currently using AUDDIS, why not submit both applications at the same time?
Do I still have to obtain signed paper Direct Debit Instructions (DDIs) from customers?
No. When you go live as a paperless Direct Debit service user, the service is truly paperless. Your customers can authorise Direct Debit Instructions (DDIs) without a signature, and they are still protected by the Direct Debit Guarantee.
How can a Direct Debit Instruction (DDI) be taken over the telephone or via the internet?
You ask the customer authorising the Direct Debit Instruction (DDI) to supply details including their bank account number, account name and sort code. If authorisation is made via the internet, the customer must key these details into a screen on your website. You then validate the information and lodge the Direct Debit Instruction with the paying bank via AUDDIS. All telephone scripts and internet screens for setting up a Direct Debit Instruction must be approved by your bank.
What confirmation does a customer receive if no paper Direct Debit Instruction (DDI) is signed?
You must then send confirmation to the customer within three working days of their verbal or internet instruction. Alternatively, provided the first collection is made within a month of the Direct Debit being set up, the confirmation incorporating the advance notice, must be received by the customer no later than the number of working days in accordance with their advance notice period before the first collection.
If a customer does not recall authorising a Direct Debit payment which has been made from their account what action should be taken?
The customer's bank should request a copy of the Direct Debit Instruction (DDI) from you and under the terms of the Direct Debit Guarantee, whilst this is being verified, the customer is entitled to a refund of the debited amount. If you are unable to supply a copy of the Direct Debit Instruction within 7 working days, which is likely to be the situation for paperless Direct Debit service users, then you must refund the bank with the amount of the payment. You will then need to liaise with the customer. There may be circumstances where you can challenge the indemnity claim. See The Service User's Guide and Rules to the Direct Debit Scheme for further information.

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Guide and Rules microsite
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The Little Bacs Book
The essential guide for making and collecting payments by Bacs Direct Credit and Direct Debit
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Short video showing how quickly and easily messaging reports can be collected from payment services website
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