BACS Direct Debit

BACS (Bankers' Automated Clearing Services) Direct Debit is a payment scheme that lets you collect recurring or one-off payments directly from your customer's UK bank account. Unlike real-time payment methods, BACS Direct Debit runs on a three-business-day settlement cycle, and every payment is backed by a mandate that carries its own legal requirements. Checkout.com handles this complexity for you, so you don't need to work directly with the BACS scheme rules.

Information

To enable BACS Direct Debit payments on your account, contact your account manager or request support.

Model	Collecting
Payment method	Direct debit
Auto capture
Void
Deferred capture
Partial capture
Refund
Partial refund
Chargeback	Returns and chargebacks
Recurring payment

Before you can collect any BACS Direct Debit payments, you must onboard onto the BACS scheme and be assigned a Service User Number (SUN). Checkout.com acts as your facilities manager and collects funds on your behalf using our owned and co-owned SUNs.

Checkout.com offers the following setup paths:

Setup option	Description	Billing descriptor	Account validation	Approximate setup timeline
Shared Checkout SUN	You onboard onto a SUN that Checkout.com operates and shares across merchants. You must create all mandates as new.	`Checkout`	Supported. We validate account ownership during mandate creation through our API.	Immediate
Individual dedicated SUN	You apply for a dedicated SUN under Checkout.com's facilities manager setup. You must create all mandates as new.	`Checkout RE Merchant Name`	Supported. We validate account ownership during mandate creation through our API.	Up to 4-8 weeks
Transfer of an existing SUN (bulk change)	You transfer an existing SUN into Checkout.com's facilities manager environment. We migrate your existing mandates and consumer authorizations.	`Checkout RE Merchant Name`, once the migration is complete	Bulk validation supported.	Up to 16 weeks

To set up a SUN for your account, contact your account manager or request support.

Before you can collect a BACS Direct Debit payment, you must set up a Direct Debit Instruction (DDI) for your customer. Checkout.com creates the DDI, and the underlying mandate with the BACS scheme, when you create a payment instrument for your customer's bank account.

To set up a DDI, you collect the following information from your customer:

First name
Last name
Business name, for business accounts
Sort code and account number
Email address

Information

A BACS mandate typically becomes active within five business days of creation. You cannot collect a payment against the mandate during this period.

When you create the instrument, we validate the account_holder name you provide against the bank account details (account_number and bank_code) to verify that the account exists, is open and able to accept direct debits, and belongs to the intended customer:

Match – We create the mandate and return a 201 Created response.
Partial match – We return a 422 error to warn you of a discrepancy, and share a suggested name where available. Add "allowPartialMatch": true to your request to bypass this validation and create the mandate anyway.
No match – We return a 422 error to warn you of a discrepancy.
Error – We return an error with a reason and description from a modulus check on the bank details, for example when the account is closed or frozen.

The saved instrument contains your mandate ID, which you must provide whenever you request a BACS Direct Debit payment. You can retrieve or cancel a mandate at any time. For more information, see Set up the Direct Debit Instruction.

You can also collect your customer's Direct Debit Instruction over the phone, by email, or by fax, provided you capture the same account and consent details and share the confirmation letter and Direct Debit Guarantee.

Dear [Customer name],

Thank you for setting up a Direct Debit with us for the purchase of goods and services from [Merchant name], processed by Checkout.com on [Merchant name]'s behalf.

We have accepted your Direct Debit details. Please review the following information to ensure it's correct:

Account name
Account number
Bank sort code
Frequency, and the day or date to be debited
Date of first collection
Amount to be debited

If any details are incorrect, contact us as soon as possible on [merchant company phone number and email]. If your details are correct, you do not need to do anything, and we process your Direct Debit as normal.

We notify you in advance of your account being debited if there are any changes to the amount, date, or frequency of your Direct Debit, unless otherwise agreed. The notice period depends on your Service User Number (SUN) type, but is typically at least 10 working days. You have the right to cancel your Direct Debit at any time.

Service User Number: [Service user number]
Reference: CHECKOUT RE [Merchant name]

This Guarantee is offered by all banks and building societies that accept instructions to pay Direct Debits.

If there are any changes to the amount, date, or frequency of your Direct Debit, [Merchant name] notifies you 10 working days in advance of your account being debited, or as otherwise agreed. If you request [Merchant name] to collect a payment, we give you confirmation of the amount and date at the time of the request.
If an error is made in the payment of your Direct Debit, by [Merchant name] or your bank or building society, you're entitled to a full and immediate refund of the amount paid from your bank or building society.
If you receive a refund you're not entitled to, you must pay it back when [Merchant name] asks you to.
You can cancel a Direct Debit at any time by contacting your bank or building society. Your bank or building society may require written confirmation. Please also notify us.

Information

We recommend that you follow the confirmation letter and Direct Debit Guarantee patterns whenever you collect a Direct Debit Instruction. Following them reduces your liability for indemnity claims your customer raises under the Direct Debit Guarantee.

BACS requires that you send your customer a pre-notification (advance notice) before your first collection, and before any change to the collection amount or date. The pre-notification must contain:

The collection amount
The collection date
Your merchant name
The customer's mandate reference
Your billing descriptor, for example CHECKOUT RE MERCHANT NAME
Your Service User Number (SUN)

The default notice period is at least 10 working days before collection, unless you have a specific agreement with BACS for a shorter window.

Information

You must show the advance notice period on the Direct Debit Guarantee. We do not recommend collecting your first payment without sending a pre-notification.

Checkout.com supports two approaches:

Merchant-managed pre-notification – You send the pre-notification directly to your customer by email, SMS, or your account portal.
Checkout-managed pre-notification – Checkout.com sends the pre-notification on your behalf, using the template you configure in the Dashboard.

For more information, see Send a pre-notification.

Once a mandate is active, you can request payments on the standard BACS three-day cycle. BACS Direct Debit is not a real-time payment method, so the status of a payment can change asynchronously at any time after the initial request, and you must configure your webhook server to be notified of the final result. When you submit a payment request, we do not debit the funds from your customer immediately. We submit the request to the BACS network at 7 PM UK time, and it clears over the following three days:

Day 0 (Input) – You submit the payment request through the API. The status updates to Captured, and you receive a payment_captured webhook.
Day 1 (Processing) – The BACS network processes the request.
Day 2 (Entry) – The funds are debited from your customer's account. If the payment is returned, you receive a payment_returned webhook.

Information

Under the Direct Debit Guarantee, a customer can raise an indemnity claim even after a payment is captured. For example, via a return or chargeback. The captured status for BACS payments is highly reliable but may not represent the final outcome.

We settle the funds to your bank account according to your payout schedule with Checkout.com. Typical BACS payout schedules are T+4 to T+6, where T is the transaction date, so you receive the funds shortly after they clear from your customer.

During the lifecycle of a BACS Direct Debit payment, you can receive the following webhooks:

Webhook Description

Webhook	Description
`payment_captured`	The funds successfully cleared and captured.
`payment_rejected`	The bank rejected the debit, for example due to insufficient funds or fraud.
`payment_returned`	There was a failure after an initial success, and the funds moved out of your account. There are three types of return: Post-settlement return – Up to six days after the initial capture Chargebacks and indemnity claims – Any time after the initial capture

payment_captured

The funds successfully cleared and captured.

payment_rejected

The bank rejected the debit, for example due to insufficient funds or fraud.

payment_returned

There was a failure after an initial success, and the funds moved out of your account.

There are three types of return:

Post-settlement return – Up to six days after the initial capture
Chargebacks and indemnity claims – Any time after the initial capture

A return happens when a payment that has already settled bounces back, for example due to insufficient funds or a cancelled mandate. A chargeback happens when your customer disputes a payment with their bank, for example because you collected the wrong amount or at the wrong frequency.

Customers can reverse a payment made against a BACS Direct Debit mandate. The customer can submit a claim with their bank to reverse the payment if:

They want to revoke the direct debit authorization.
They state that they did not authorize the direct debit.

Under the Direct Debit Guarantee, your customer can raise a chargeback against an unauthorized or incorrect collection at any time, with no time limit.

If a customer initiates a return, you receive a payment_returned webhook.

You cannot challenge a BACS Direct Debit return initiated by a customer. The funds always return to the customer. If you have an issue with a reversal, contact your customer directly.

API Only

Build your own UI and integrate with our API to process BACS Direct Debit payments.

BACS Direct Debit

Information

Set up your Service User Number (SUN)

Direct Debit Instruction and account validation

Information

Information

Send pre-notifications

Information

Payment flow

Information

Settlement

Webhooks

Payment returns and chargebacks

Available for

API Only