Faster Payments moves money between UK bank accounts in close to real time, day and night, and it's what a bank transfer or a pay by bank payment uses. Bacs runs on a three-day cycle and carries Direct Debit and Direct Credit, so it's what you use to collect from customers on a schedule or pay salaries and suppliers in a batch. With Faster Payments your customer sends the money; with Bacs Direct Debit you collect it.
In this article
The short version
- Faster Payments moves money in seconds, day and night, up to £1m per payment.
- Bacs runs a three-day cycle and carries Direct Debit and Direct Credit.
- A Faster Payment can't be cancelled; a Bacs payment can be recalled before a cut-off.
- Bank transfers and pay by bank use Faster Payments; direct debit uses Bacs.
- Many businesses use direct debit for regular fees and payment links for one-offs.
The two systems side by side
Both are UK payment systems run by Pay.UK, and most businesses use both without thinking about it. Your customer's bank transfer goes over Faster Payments. Your direct debit collections and your payroll go over Bacs.
| Faster Payments | Bacs | |
|---|---|---|
| Speed | Close to real time | Three working days from submission to the money moving |
| Hours | Day and night, every day of the year | Working days only |
| Who starts it | The payer, from their bank or app | The business collecting (Direct Debit) or paying (Direct Credit) |
| Typical use | One-off payments, bank transfers, pay by bank | Direct debit collections, salaries, supplier runs |
| Can it be stopped | No, once it's sent | Yes, if your bank is told before a cut-off |
| Limit | Up to £1m, but your bank may set a lower limit | Agreed with your bank or provider |
How Faster Payments works
When your customer pays an invoice from their banking app, or approves a pay by bank payment, the money travels over Faster Payments. It usually reaches you within seconds, and it works at weekends and on bank holidays.
The scheme allows single payments of up to £1m, but each bank sets its own limit for its customers, and many are far lower, especially on personal accounts. If you're expecting a large payment from a customer, it's worth asking whether their bank will let them send it in one go.
Once a Faster Payment has gone, it can't be cancelled. That's good news when you're the one being paid, because there's no chargeback for a customer to raise later. It's bad news when the payer has typed the wrong account number or been tricked into paying a fraudster, because there's no undo. An honest mistake depends on the person who received the money agreeing to return it, and a fraud depends on the banks' reimbursement rules, which cover individuals and the smallest businesses.
Confirmation of Payee helps here. Before a transfer goes, the payer's bank checks whether the name they've entered matches the account, and warns them if it doesn't. Pay by bank removes most of the risk of typos, because your details and the reference are already filled in and your customer only approves the payment.
How Bacs works
Bacs is the older batch system, and it carries two services. Direct Debit is the one you use to collect from customers who've signed a mandate. Direct Credit is the one businesses use to pay salaries and suppliers in bulk.
A Bacs payment takes three working days. On day one you, or your provider, submit the file. On day two the banks process it. On day three the money leaves the payer's account and arrives in yours. Files can go in up to 30 days ahead of the payment date, and a submitted payment can be recalled if your bank is told before a cut-off time.
For direct debit there's a further step first. You have to tell your customer the amount and the date in advance: ten working days under the scheme's default, or a shorter period if you've agreed one. Once a mandate is in place, collections carry on each month without your customer doing anything, and they can still cancel the mandate with their bank at any time.
If you collect through a provider, it usually pays the money out to you a few days after the collection date. So a direct debit collected on the due date can show as unpaid in your accounts for a couple of days when nothing has gone wrong.
Which one to use for getting paid
You don't usually pick a payment system directly. You pick how you want to be paid, and the system follows.
If you want your customer to decide when to pay, they'll use Faster Payments, either by typing your bank details into their app or by paying a pay by bank link you send them. The money arrives fast, but only once they get round to it, so you're carrying the risk of having to chase.
If you want the payment to happen on a date you set, without your customer doing anything each time, that's Bacs Direct Debit. It's slower to arrive and needs a mandate first, but it suits retainers, subscriptions and any fee that repeats.
Many businesses use both: direct debit for regular fees and a payment link for one-off invoices. Adfin offers both on the same invoice, along with card, Apple Pay and Google Pay. Pay by bank payments reach your account the same day and direct debits within three working days of the collection date, all paid out in full and matched back to the invoice in Xero or QuickBooks. If a payment doesn't arrive, Adfin's Customer Agents can chase it by email, SMS or WhatsApp on a schedule you set.
Common questions
Is a bank transfer the same as Bacs? Not usually. An everyday bank transfer from a banking app goes over Faster Payments and arrives within seconds; Bacs is the system behind direct debits and bulk payments like payroll.
How long does a Bacs payment take? Three working days from submission: the file goes in on day one, is processed on day two and the money moves on day three.
What is the maximum Faster Payment? The scheme allows up to £1m per payment, but your bank sets its own limit, which may be much lower.
Can a Faster Payment be cancelled? No. Once it's sent it can't be cancelled, so a payment sent in error has to be recovered with the help of the receiving bank.
Can a Bacs payment be recalled? Yes, if your bank is told before a set cut-off time after the file has been submitted.
What about CHAPS? CHAPS is a third UK system, run by the Bank of England, for high-value payments that need to arrive the same working day, such as a property completion. Banks usually charge a fee for it.
Sources
- Pay.UK - Faster Payment System (accurate as of October 2026) https://www.wearepay.uk/what-we-do/payment-systems/faster-payment-system/
- Bacs - Direct Debit, getting started (accurate as of October 2026) https://www.bacs.co.uk/bacs-schemes/getting-started/direct-debit/
- Bank of England - CHAPS (accurate as of October 2026) https://www.bankofengland.co.uk/payment-and-settlement/chaps
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
