Also in the Direct Cebit Resource Centre:
The Direct Credit Process
To make a Bacs Direct Credit payment you need to know the payee’s sort code, the account number of the payee’s bank or building society account and the payee’s name. You submit your payment data, which include the above information plus the amount of each payment, via a bureau or directly using in-house software (depending on which method you choose). The data is sorted into payments to each of the banks and then transmitted to each institution. This data is downloaded into their systems and applied to the relevant customers’ accounts and debited to yours.
The Bacs Processing Cycle
The entire Bacs processing cycle is simple and efficient – and it takes less than three days from start to finish.
Input – day 1
Input day is the day the Service User transmits automated data (either directly or via a bureau) to Bacs for a processing cycle. Payment files must be transmitted between 07.00 and 22.30
Processing – day 2
All data accepted is processed (the working day before entry day). Files are delivered to the recipient banks which then process each payment.
Entry – day 3
All correctly addressed payments are simultaneously credited to the recipients’ accounts and debited from your account
Direct Credit Transaction Codes
Direct Credit payments must be submitted with the appropriate transaction code to indicate the type of credit being submitted. If the payment cannot be applied for any reason, the funds will be returned no later than Day 5 of the Bacs Processing Cycle (Day 1 being Input Day). An ARUCS report will be generated by Bacs advising that the payment has not been applied and providing reasons why. The transaction codes are as follows:
- 99 – Bacs Direct Credits
- 17 – Credit contra (a debit record to balance credit record)
- Z4 – Interest payments
- Z5 – Dividend payments
- E2 – Credit card refund
Direct vs Indirect Submission
To make Bacs Direct Credit payments, there are two different methods for submitting your payment data to the Bacs service. The most suitable one for you will depend on the needs and resources of your business.
Indirect (Bureau) access
This is via a bank or bureau and is often the most suitable method for smaller businesses or those with a limited number of payments. Banks and bureaux can accept data by fax, telephone, post, or electronically and can provide additional services (eg payslips).
Direct (software) access
Direct submission of your payments file can be faster and cheaper than using a bureau where you will be processing a high volume of payments. Access is via Bacstel-IP, based on internet protocol and using the latest PKI technologies.
When you decide to introduce Bacs Direct Credit, the first thing to do is to consult your bank who will advise you on the most appropriate and cost effective method for your business, and the facilities you may require. They will also provide you with all the procedural information you will need before authorising you to use Bacs Direct Credit.