Technology today has made making payments and electronic banking a staple in the economy. While writing cheques is still a popular method for making and accepting payments, there are a variety of options for people and businesses to make and process payments today. And in the current stage of modern banking, there are many different ways you can pay your bills without ever leaving the comforts of your computer or office.
Payment Processing Options
- BACS – BACS is the “Bankers’ Automated Clearing Scheme” and is how customers pay bills using direct debit or direct credit. It is considered the most popular way to process payments in the UK. When you receive multiple bacs payments from many customers, using a cloud-based automated payment software will allow for a smoother method of processing direct debit and credit transactions.
Furthermore, the system provides greater convenience for customers as the bacs payment timemeans you’ll process their payments faster, which records in their bank accounts quicker. Accepting BACS payments is one of the fastest, most efficient means of payment processing and it enables processing of many transactions within minutes. BACS also allows you to build a hierarchy in your approval processes and rules to maintain and restrict permissions.
- Direct Debit – Direct debit is when a business has a standing contract in place to automatically withdraw funds from your bank account on a specific schedule, for example monthly or weekly. Direct debit is often used to pay bills like cell phones, and car insurance. The direct debit amount can usually be altered according to the price of the bill.
- BACS Direct Credit – An efficient and quick way to send and receive payments. Traditionally used for salary and wage payments, direct credit has extended use to paying employees expenses, disbursing dividends, pension payments, and issuing refunds. This type of payment processing is faster and more efficient than cash or cheques. It works great with fixed or scheduled payments and is cost effective as it reduces the need for shipping and postage items.
- Straight Through Processing – Straight through Processing helps to mitigate the risk of human error, avoid manual rekeying of data, and reduce processing delays by automating payment processes from start to finsih. This means little to no human interaction along the way. Using STP to automate payment transactions reduces fraud risk, improves data accuracy and reliability and leaves more time for you and your staff to focus on other areas of your business.
- Online banking – Online banking is when you set up payments to be made to billers and creditors through your own banking portal. This allows you to control when and how much is sent. Using this options means you must manually enter payment information in each time you want to send a new one or change the current schedule and amount on a payment. Typically, this is great for individuals to use but large business will find this task tedious and time consuming. This also leaves more room for fraudulent conduct and means you should rely solely on your bank statements to produce any reporting. Reporting is not automated.
- Cheques – Cheques are still widely accepted. While banking has automated cheque writing and business are no longer hand-writing cheques, this is still the most time consuming way to send and receive payments. New features on mobile banking apps allow you to snap a picture and deposit the check without having to go to the bank.
- Electronic Funds Transfers – Transferring funds directly from one bank account to another. This type of payment processing is often used for paying employees via direct deposit. That is setting up your bank account to send out payments to multiple other bank accounts on a schedule. Business can also use this option to pay vendors and suppliers.
What started with paper money and hand-written notes in the dawn of banking is now an almost fully automated, online, and accessible in real time all the time banking system. Processing payments the old way, via cheques and other slow methods is outdated. To fully make use of today’s automated banking world relying on the best automated process for you, whether you are an individual or a large or small business will help you save money, stay safe, and create better use of your time.