Bacs Direct Debit payments in the UK

Stripe users in the UK can accept Bacs Direct Debit payments from customers with a UK bank account.

To debit an account, businesses must collect a mandate from their customers. The mandate includes the customer’s sort code, account number, name, email, and full address. Stripe can generate this mandate for businesses to present to their customers.

BACS Direct Debit transactions have a limit of 100,000 GBP each. New users have an additional weekly limit of 10,000 GBP, which quickly increases as you process more BACS Direct Debit payments. If you need higher limits, contact support.

Bacs Direct Debit is a reusable, delayed notification payment method. This means it takes 4 business days to confirm the success or failure of a payment when a mandate is already in place, but when you must collect a new mandate, it can take 7 business days.

Verification Requirements

Using Bacs Direct Debit requires you to complete additional identity verification steps. We prompt you to complete these steps after you request access from the Payment methods settings. If you require further assistance, contact support.

Get started

You don’t have to integrate Bacs Direct Debit and other payment methods individually. If you use our front-end products, Stripe automatically determines the most relevant payment methods to display. Go to the Stripe Dashboard and enable Bacs Direct Debit. To get started with one of our hosted UIs, follow a quickstart:

• Checkout: Our prebuilt, hosted checkout page.
• Elements: Our drop-in UI components.

Other payment products

The following Stripe products also let you add Bacs Direct Debit from the Dashboard:

• Invoicing
• Payment Links
• Subscriptions

If you prefer to manually list payment methods or want to save Bacs Direct Debit details for future payments, see the following guides:

• Manually configure Bacs Direct Debit as a payment
• Save Bacs Direct Debit details for future payments

Timing

With Bacs Direct Debit, it can take several business days for funds to become available in your Stripe balance. The number of business days it takes for funds to become available is called the settlement timing. Payments are generally submitted on the same day that they’re created, but are processed on the following business day if they’re created on a non-business day or after the cutoff time.

It takes 4 business days to confirm the success or failure of a Bacs Direct Debit payment when a mandate is already in place and 7 business days when you must collect a new mandate.

In some cases, the bank might notify us of a payment failure after the payment has been marked as successful in your Stripe account. In this case the payment failure is identified as a dispute with the appropriate reason code.

The following table describes the settlement timings for Bacs Direct Debit payments that Stripe offers. T+x refers to x business days after submission, which might differ from the payment creation date.

This table shows the Bacs timeline in business days from the time (T) that a payment is made when a new mandate must be collected:

Faster Settlement Private preview

Faster Settlement lets eligible users of Bacs Direct Debit make funds available for payout in two business days before the payment succeeds. Payments can still fail after funds become available. If that happens, Stripe immediately removes the funds from your balance.

Debit notifications

Bacs Direct Debit requires that customers are notified of the following:

• When payment details are initially collected and confirmed
• Each time a debit will be made on their account

By default, Stripe automatically sends emails to the customer for the above cases. You can customize the colors and logo for these emails to fit the design and branding of your business.

If you require sending your own customer email notifications, follow these steps to customize your Business Display Name and contact us for approval of your email templates.

Disputes

Bacs Direct Debit provides a dispute process for customers to dispute payments.

When a dispute is created, Stripe sends a charge.dispute.created webhook event and deducts the dispute amount from your Stripe balance.

Unlike credit card disputes, Bacs Direct Debit disputes are final and can’t be appealed. If a customer successfully disputes a payment, you must contact them if you want to resolve the situation. If you’re able to come to an arrangement and your customer is willing to return the funds to you, they must make a new payment.

Mandates

As part of the payment process, businesses must collect a mandate which gives them authorization to debit an account. For Bacs, this mandate is called a Direct Debit Instruction, or DDI. You can find information on how to collect a mandate with Stripe Checkout on the Accept a payment page.

Customers can request the cancellation of a mandate at any time. To cancel a mandate, a customer can either reach out to the party they established the mandate with, or to their bank. Canceling a mandate invalidates any future debit requests that you issue using this mandate. If you want to accept additional payments from your customer, or continue using Bacs Direct Debit for a Subscription, you need to establish a new mandate by recollecting payment details.

Mandate cancellation

Mandate cancellation ensures that no further debit requests can be made using the canceled mandate. When a customer requests cancellation through the party they established it with or directly through their bank, it renders any future debit requests associated with that mandate invalid. You can also cancel active mandates by detaching the payment methods and sources associated with them. You can detach a payment method by deleting it from the Customer view in the Stripe Dashboard or by using the API.

Customers can also contact their bank to transfer existing mandates to a new bank or to report a name change. In these cases, Stripe automatically handles the update and reflect the updated mandate details.

Mandate events

The mandate can change at any time after you’ve collected it. This might be the result of the customer instructing their bank to amend the mandate or because of a change in the bank itself (for example, the customer changes to a different one). Stripe sends the following events when the mandate changes:

These events are available in the Dashboard, but you can set up a webhook to handle these programmatically.

Refunds

Refunds for payments made with Bacs Direct Debit must be submitted within 180 days from the date of the original payment. Refunds require additional time to process (typically 3-4 business days). If you accidentally debit your customer, please contact them immediately to avoid a payment dispute.

You can issue full or partial refunds for Direct Debit payments by using the API to create a refund with the PaymentIntent object.

Refunds are processed only after the payment process is complete. If you create a full or partial refund on a payment that hasn’t completed yet, the refund process starts when the Charge object’s status transitions to succeeded. If the Charge object’s status transitions to failed, the full or partial refund is marked as canceled because the money was never debited from the customer’s bank account.

Checkout

Checkout creates a secure, Stripe-hosted payment page that lets you collect payments quickly. You can use Checkout to collect Bacs Direct Debit payments, or collect payment details that you can use to initiate payments at a later date.

Request the bacs_debit_payments capability

Platforms in the UK don’t need to request the bacs_debit_payments capability for their UK Connect accounts when performing destination charges. Platforms outside the UK might still need to process Bacs Direct Debit payments for their UK Connect accounts, and they must have the bacs_debit_payments capability enabled.

In both scenarios, you must request the bacs_debit_payments capability if you want to use the on_behalf_of parameter.

Requesting the bacs_debit_payments capability with settings.bacs_debit_payments.display_name automatically enables custom branding. This allows you to collect mandates using the connected account’s chosen display name as the statement descriptor.

Each account that uses custom branding incurs a 50 GBP monthly fee.

If you don’t want to use custom branding, you can do either of the following:

• Request the capability without specifying settings.bacs_debit_payments.display_name
• Set the default value of settings.bacs_debit_payments.display_name = Stripe before requesting the capability

Custom Branding

Upgrade to Custom Branding if you want to customize your customer’s bank statements, Stripe Checkout, and customer emails for direct debits to show your business name.

You can enable Custom Branding for your account in your Bacs Direct Debit settings.

For your Express or Custom accounts, you can enable Custom Branding by selecting settings.bacs_debit_payments.display_name in the API.

You can do this during account creation or when updating the account after setup.

If you request the bacs_debit_payments capability without specifying settings.bacs_debit_payments.display_name, the account defaults to Stripe branding.

Custom Branding is charged at 50 GBP per active month. Your business name is shown for new mandates created 5 business days after your request. To expedite Custom Branding or apply it to multiple connected accounts for a single fee, contact us.

If you don’t use your custom branding for a long period of time, your account automatically reverts to the default Stripe branding. Alternatively, if you have no active Bacs Debit mandates you can revert to the default Stripe branding in your Bacs Direct Debit settings.

Billing Retries Private preview

With Direct Debit retries, Stripe can automatically retry failed Direct Debit payments caused by insufficient funds. You can turn on retries for recurring subscription invoices, one-off invoices, or both.