FAQs
We have pulled together some commonly asked questions to help your business understand more about Bacs services.
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.
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You will receive notification of any rejected Direct Debit Instructions (DDIs) within five working days of sending the Direct Debit Instruction to the paying payment service provider advising the reason for return.
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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 payment service provider (PSP) 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 PSP is satisfied that you meet the criteria required to join, you will be accepted.
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The benefits of not having to send paper Direct Debit Instructions (DDIs) to payment service providers 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.
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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 PSP about the checking procedures you intend to adopt.
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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 PSP prior to use.
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There's only one major difference with AUDDIS - the signed Direct Debit Instruction (DDI) is retained by you, not the paying payment service provider (PSP). You simply enter your customers' details into your own system and send them electronically - via Bacs - to the customer's PSP.
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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.
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Most customer queries can easily be resolved by their PSP or the service user without recourse to the Direct Debit Instruction (DDI) itself. In general, PSPs only need to request a Direct Debit Instruction when a customer disputes signing it.
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No, because either the customer or payment service provider 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.
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Yes. Fax or photocopies, digital or microfiche images are all acceptable, as long as the customer's signature is clearly visible.
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You are advised to carry out modulus checking within your systems, which will identify invalid sort code and account number combinations for most payment service providers (PSP). 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 PSP. Modulus checking does not verify that the account details belong to the payer.
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Sometimes it's difficult to be certain because you won't be aware of signing instructions applicable to different 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.
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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.
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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.
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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 payment service providers request, you may be requested to refund money under the terms of the indemnity.
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Yes. All Direct Debit Instructions (DDIs) should be submitted to the paying PSP 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 PSPs hold details of DDIs on file for a minimum of 24 months from receipt or last payment. In exceptional circumstances, you may apply to your PSP for an extended dormancy period when applying to join AUDDIS. If accepted your PSP will advise the paying PSPs.
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You must provide a copy within seven working days from the date of the request.
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You may be liable for any Direct Debit collected under the Direct Debit Instruction (DDI).
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You are liable. However, under the terms of the Direct Debit Guarantee, the paying payment service provider must refund the customer immediately, and then reclaim the amount refunded from you through an indemnity claim.
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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 accounts.
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Direct Credit is simple, secure, reliable, and widely available; it is generally used to pay large numbers of recipients, for instance for payroll or for settling invoices from multiple suppliers.
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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.
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Control of a Bacs Direct Credit will typically rest with a payer’s payment service provider (PSP). A PSP can authorise a company to make Bacs Direct Credit payments and is responsible for overseeing the operation of Bacs Direct Credits.
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Your payment service provider (PSP) 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 PSP service. As a rule, you need the name of the payee, the name of their PSP, the payee’s 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.
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To arrange this you must contact the branch where you maintain your account no later than one 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 payment service provider (PSP) will contact the beneficiary PSP 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 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 may need to contact the beneficiary direct however check with your PSP in the first instance.
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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 payment service provider (PSP) 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 PSP is still unable to locate the payment you should contact the remitting organisation as soon as possible so they can initiate an investigation.
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Just ask! Alternatively, you could write to all your suppliers and include details on all your invoices.
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The minimum information you require is their 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 statement, so that you can verify these details.
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It's best to get a separate number from your sponsoring payment service provider. 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.
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Where many of the payments are incorrect, it may be better to cancel all the payments by asking your payment service provider (PSP) 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 PSP 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 once your PSP has actioned the request. This will be advised in a withdrawal report available from the Payment Services Website. Check the details to ensure that the correct action was taken.
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Set a realistic monthly account limit with your payment service provider which should be reviewed at regular intervals.
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The Current Account Switch Service has been developed to make switching a current account from one payment service provider to another, simpler, reliable and hassle-free.
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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 the Payment Transfer Service. This does not include a Guarantee or a redirection facility, but enables the account holder to maintain two accounts.
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To provide peace of mind for the account holder in the event that payments are accidentally sent to the old account.
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Advice of Wrong Account for Credit Service (AWACS) is a messaging service by which payment service provider (PSP) advise service users such as yourself of amendments to your customers PSP account details. The advices are available to you in the form of reports and you are required to action these advices within 3 working days of the report being available 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.
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You must still take action within 3 working days of the report being available when you receive an AWACS advice notifying you of changed payment details to ensure your customer is not adversely impacted in the future.
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You can let the payment continue to the old payment service provider (PSP), as the redirection service will in most cases result in the payment reaching the new PSP. Only the full Current Account Switch Service offers the redirection service. Customers may have requested the Payment Transfer Service which does not 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.
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In most cases the central redirection service will result in the payment reaching the new payment service provider (PSP) however the central redirection service applies to full account switches only. Payments are not redirected where a customer chooses the Payment Transfer Service. In such cases a payment addressed to the old PSP may be returned via the Automated Return of Unapplied Credits Service (ARUCS).
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Visit maintaining payment records for further information or contact your sponsoring payment service provider who will be able to answer any questions you may have.
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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.
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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.
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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.
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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.
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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.
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No, an email notification is sent to advise which report is ready for collection.
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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.
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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.
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Reports will be held on the Bacstel-IP web server for a period of 37 calendar days, with the exception of ADDACS and AWACS reports which are held for 93 calendar days. If necessary, the sponsoring payment service provider customer service groups have access to archived records.
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Bacstel-IP is the platform for automated payments.
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 fast, 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. -
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.
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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.
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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 account data and, most importantly, assuring compliance to the Bacstel-IP interface which requires digital signing and SSL.
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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.
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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 payment service provider 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.
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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.
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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 payment service provider.
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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 payment service providers 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).
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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 payment service provider customer service group (CSG).
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Smartcards can be connected via serial, PCMCIA and USB interfaces. Customers are advised to speak to their sponsoring payment service provider regarding the various types of smartcard readers and signing software available to them.
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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.
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Solution suppliers establish charges for different versions of a package required to support either a smartcard and / or Hardware Security Module (HSM) based environment.
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Smartcard readers and signing software are usually supplied by the solution supplier and are incorporated into the cost of the solution. However some sponsoring payment service providers (PSP) may also issue the smartcard readers and signing software as well as issuing the actual smartcard. Any charges are subject to each PSPs terms and conditions.
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Currently, one smartcard can be used for multiple user numbers but a separate smartcard per sponsoring PSP 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 PSP can only be used to secure Bacstel-IP communications relating to a service user with that PSP.
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.
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Smartcards may have a lifespan of up to 5 years. Sponsoring payment service providers will usually issue their smartcards and digital certificates with a lifespan of three years.
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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.
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It is advisable for businesses to have two card readers as a contingency. You should discuss this with your sponsoring payment service provider (PSP). Most sponsoring PSPs 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.
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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, payment service providers and consumers to exchange information.
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Bacstel-IP offers the ability to submit payments and collect reports across two connectivity types; the internet, and Fixed Extranet Connect.
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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.
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Internet connections are dependent on the user's own connection to their ISP for example dial up, ISDN, broadband and so on.
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The Current Account Switch Service has been developed to make switching a current account from one payment service provider to another, simpler, reliable and hassle-free.
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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 the Payment Transfer Service. This does not include a Guarantee or a redirection facility, but enables the account holder to maintain two accounts.
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To provide peace of mind for the account holder in the event that payments are accidentally requested from the old account.
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The Automated Direct Debit Amendment and Cancellation Service (ADDACS) is a messaging service by which payment service providers (PSP) advise service users such as yourselves of amendments to your customers PSP account details. The advices are available to you in the form of reports and you are required to action these advices within 3 working days of the report being available 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.
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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.
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You are encouraged to let the collection continue to the old payment service provider (PSP), as in most cases the central redirection service will result in the collection reaching the new PSP. You must however update your records as per the ADDACS advice in time so further collections are directed to the new account details.
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You are encouraged to let the collection continue to the old payment service provider (PSP) as in most cases the central redirection service will result in the collection reaching the new PSP. You must however update your records as per the ADDACS advice in time so further collections are directed to the new account details.
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Should this unlikely scenario occur, contact your sponsoring payment service provider who will be able to resolve this on your behalf.
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In most cases the central redirection service will result in the collection reaching the new payment service provider (PSP), however the central redirection service applies to full account switches only. Direct Debit collections are not redirected where a customer chooses the Payment Transfer Service. In such cases a Direct Debit collection addressed to the old PSP will be returned unpaid reason code 3 (Account transferred to a new PSP).
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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 payment service provider will also be able to answer any questions you may have.
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If you are already using AUDDIS, yes. Just apply to your payment service provider, 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?
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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.
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You ask the customer authorising the Direct Debit Instruction (DDI) to supply details including their 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 payment service provider (PSP) via AUDDIS. All telephone scripts and internet screens for setting up a Direct Debit Instruction must be approved by your PSP.
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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.
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The customer's payment service provider (PSP) 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 PSP 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.
