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.
Note: From 1 July 2027 it will not be possible to apply for a non-AUDDIS Service User Number
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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.
Note: From 1 July 2027 it will not be possible to apply for a non-AUDDIS Service User Number
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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. Photocopies and digital (i.e. a scanned copy or JPEG) are both 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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Bacstel-IP is a secure online channel that organisations use to submit automated payments into the Bacs service. It uses Public Key Infrastructure, often called PKI, to help protect payment files and confirm that submissions are made securely.
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Bacstel-IP gives businesses a secure way to submit Bacs Direct Credits, Direct Debits and Direct Debit Instructions into the Bacs service. This helps organisations manage automated payments using an approved and reliable submission route.
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Bacstel-IP submission software is available from approved software suppliers. Approval means the software has been tested against Bacs business rules and meets the requirements needed to access Bacstel-IP.
A list of Bacs approved software is available from Pay.UK.
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The Bacs Approved Software Service is the approval process used to check that software meets Bacs requirements before it can be used for Bacstel-IP submissions.
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The cost will depend on the type and complexity of the solution. This is a commercial matter between the service user and their software supplier.
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Yes. A business can develop its own Bacs Approved Software Service solution, but it must meet the same rules and approval requirements as commercially available software.
If a business needs more information, it should speak to its sponsoring payment service provider or review the Bacs approved software information provided by Pay.UK.
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The right contact depends on the type of issue:
- Connectivity issue: contact the Bacs approved software supplier.
- Log-in or password issue: contact the sponsoring payment service provider.
- General Bacs processing query: contact Bacs Service Desk.
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These checks help make sure the payment data is valid before the file is sent into the Bacs payment system. Bacs approved software should use the latest Industry Sorting Code Directory, known as the ISCD, to support these checks. If a single item fails validation, the business can stop the file before submission and correct the issue.
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When the submission is complete, validation and security checks confirm whether the file has been received successfully and whether its integrity has been maintained. Bacstel-IP then sends an acknowledgement back to the user’s software so the operator can see the outcome. On input day, an input report is made available electronically so the user can check the result and correct any errors where needed.
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Reports are grouped by type, which helps organisations manage who can access each report group.
- Input reports, including arrival, submission and input reports.
- Payment advice reports, including ARUDD and ARUCS.
- Message advice reports, including ADDACS and AWACS.
Email notifications can also be sent when a new report is ready. Up to three contact points can receive notifications for each report group.
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Reports 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. CSV format is available for some reports.
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No. The report itself is not sent by email. Instead, an email notification is sent to let the user know that the report is ready to collect.
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The service user cannot collect the report directly from Bacstel-IP, but they can retrieve it through their bureau. Indirect submitters can also view their reports on the Payment Services Website, known as PSW.
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Most reports are available on the Bacs service for 37 calendar days. ADDACS and AWACS reports are available for 60 calendar days. If needed, the sponsoring payment service provider may have access to archived records.
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Signing individual files can support a business’s own internal approval process. For example, a financial director or controller may need to approve and sign a file before it is submitted by another team. The full submission is then also signed as part of the Bacstel-IP submission process.
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A smartcard is usually used for attended signing. This means an authorised user must enter their PIN each time a signing action is required.
A Hardware Security Module is generally used for unattended signing. This may be suitable for larger, higher volume service users that require straight through processing.
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Costs should be discussed with the sponsoring payment service provider and the solution supplier. Pricing will depend on the solution chosen and the commercial arrangements in place.
Are there charges for digital certificates, smartcards and readers?
Any charges will depend on the sponsoring payment service provider’s terms and conditions and the solution supplier’s pricing.
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One smartcard can currently be used for multiple user numbers, but a separate smartcard is required for each sponsoring payment service provider.
Smartcards are issued to individual users and must not be shared. This is important for security and audit purposes.
PKI credentials issued by one sponsoring payment service provider can only be used for Bacstel-IP submissions linked to service users sponsored by that provider.
Each user number or bureau number must have at least two registered primary security contacts. The same primary security contact can be assigned to more than one user or bureau number where the sponsorship is the same.
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The lifespan of a smartcard can vary by sponsoring payment service provider. Service users should check this with their sponsor.
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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.
