Banking : BACS

Banking : BACS

The Bankers Automatic Clearing System (BACS) is used by companies to automatically transfer money from one bank account to another.

To make payments using the BACS system a company must have a computer with BACS software installed on it. The company must also have a modem to send details about the payments it wants to make to the bank's computer.

Typically a company will use the BACS system to :

Pay wages into the bank accounts of their employees on a regular basis.
Pay bills that they have received from other companies.

To make a payment by BACS a company must send this information to the bank :

1.	The account number of the account that the money is being paid from.
2.	The amount that is to be paid.
3.	The account number of the account that the money is being paid into.
4.	The name of the person that the money is being paid to.

The bank's computer will validate the payment details. It does this by checking that the account number that the money is being paid into exists, and by checking that the account belongs to the named person. If the account does not exist or does not belong to the named person than the payment will not be made and an error message will be sent to the company that tried to make the payment.

GCSE ICT Companion 04 - (C) P Meakin 2004