Bacs Direct Credit
A UK Bacs Direct Credit pushes a salary payment from employer to employee through a fixed three-working-day batch cycle, where nothing moves until entry day.
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Day 1 — Asha Traders submits the Bacs payment file
Asha Traders (employer) → Bacs (Pay.UK) · Bacs Standard 18 payment file
On Day 1 the employer sends its payroll file to Bacs through its bank. This is an instruction to pay, not money moving — it enters the fixed three-working-day cycle. Bacs is a batch system, so the file waits its turn.
Step 1 of 6: Day 1 — Asha Traders submits the Bacs payment file
- 02ProcessingDay 1 — Bacs validates and accepts the fileBacs (Pay.UK)
- 03Clearing obligationDay 2 — Bacs processes the file and passes entries to the banksBacs (Pay.UK) → Nordbank (payee bank)
- 04SettlementDay 3 — Interbank settlement in central bank moneyBank Alfa (payer bank) → Nordbank (payee bank)
- 05PostingDay 3 — Asha Traders is debitedBank Alfa (payer bank)
- 06PostingDay 3 — Riya is creditedNordbank (payee bank)
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- 02ProcessingDay 1 — Bacs validates and accepts the fileBacs (Pay.UK)
Bacs checks the file's format and account details and accepts it into the current cycle. Acceptance means the payments are scheduled for the three-day rhythm — still no money has moved anywhere on Day 1.
- 03Clearing obligationDay 2 — Bacs processes the file and passes entries to the banksBacs (Pay.UK) → Nordbank (payee bank)
On Day 2 Bacs sorts the file and passes each entry to the paying and receiving banks so they can prepare. These entries are obligations for the next day, not yet money — the banks know who will owe whom on entry day.
Day 2 produces obligations, not funds. The banks now hold the entries and know what they must debit and credit on Day 3, but nothing has actually been paid.
- 04SettlementDay 3 — Interbank settlement in central bank moneyBank Alfa (payer bank) → Nordbank (payee bank)
On Day 3, the entry day, the net obligations from the cycle settle across the banks' accounts at the Bank of England. Only now does money actually move between Bank Alfa and Nordbank in central bank money.
- DR Bank Alfa settlement account — GBP 3,200.00
- CR Nordbank settlement account — GBP 3,200.00
- 05PostingDay 3 — Asha Traders is debitedBank Alfa (payer bank)
Also on Day 3, Bank Alfa books the debit against the employer's account. In the Bacs cycle the payer's debit and the payee's credit both land on entry day together — nothing was taken on Day 1 or Day 2.
- DR Asha Traders' account at Bank Alfa — GBP 3,200.00
- 06PostingDay 3 — Riya is creditedNordbank (payee bank)
Nordbank credits the employee's account on the same entry day. The three-day rhythm completes: submitted Day 1, entries passed Day 2, and money debited, settled, and credited all together on Day 3.
- CR Riya's account at Nordbank — GBP 3,200.00
What this simplifies: One salary payment represents an entire Bacs batch file, and the diagram shows a single clean three-day cycle rather than the netting of many payments across all participating banks.
Sources for this flow2
- Scheme-specific rule
Bacs (Direct Debit and Direct Credit) ↗ — Pay.UK
Bacs runs a fixed three-day cycle: day 1 submission, day 2 processing, day 3 debit and credit taken together. Direct Debit adds days 4-5 for the Automated Return of Unpaid Direct Debits (ARUDD).
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: A single payment stands in for a whole batch file; net settlement across many participants and multiple daily submission windows are omitted, and one Automated Return type stands in for the full range of return and contra reasons.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.