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 is a reusable, delayed notification payment method. This means it takes 3 business days to confirm the success or failure of a payment when a mandate is already in place and 6 business days when a new mandate must be collected.
Get started
We recommend you use Checkout or the Payment Element so you can automatically add Bacs Direct Debit and other payment methods from the Stripe Dashboard, without changing your code. Stripe then determines the list of supported payment methods to show each customer by evaluating the currency, payment method restrictions, and other parameters.
The following Stripe products also support adding Bacs Direct Debit from the Dashboard:
If you prefer to manually list payment methods or want to save Bacs Direct Debit details for future payments, see the following guides:
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.
Disputed payments
Bacs Direct Debit provides a dispute process for customers to dispute payments.
Customers can dispute a payment through their bank for an unlimited period of time.
When a dispute is created, Stripe sends a charge.dispute.created webhook event and deducts the dispute amount from your Stripe balance. Bacs Direct Debit disputes don’t incur a fee.
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 must 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, you need to establish a new mandate with them.
Mandate events
The mandate can change at any time after you’ve collected it. This may 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:
| Event name | Description | Can accept payments? |
|---|---|---|
mandate.updated | Occurs whenever a mandate is rejected, canceled, or reactivated by the Bacs network. Check mandate.status to determine if the mandate can continue to be used. | Yes, if the new status is active |
payment_method.automatically_updated | Occurs when a customer’s bank account details change. | Yes |
These events are available in the Dashboard, but you can set up a webhook to handle these programatically.
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.
Refunds aren’t part of the Bacs Direct Debit scheme and are provided outside of Bacs Direct Debit by Stripe. Since Bacs Direct Debit has an indefinite indemnity period, if a customer creates a dispute any time after a refund has been issued, you can lose both the disputed amount and the amount you refunded separately.
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.
Timing
It takes 3 business days to confirm the success or failure of a Bacs Direct Debit payment when a mandate is already in place and 6 business days when a new mandate must be collected. Payments made after 20:00 UTC are submitted the following business day.
In some cases, the bank may 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.
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:
| T+0 | Mandate submitted |
| T+3 | Mandate is active and the payment is submitted |
| T+5 | Funds leave the customer’s bank account |
| T+6 | Funds are available in Stripe |
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.
Connect
Stripe Connect can be used with Bacs Direct Debit to process payments on behalf of others.
Connect users can use Bacs Direct Debit with the following account and charge types:
| Account types | Charge types | Stripe’s recommendation | |
|---|---|---|---|
| Custom with destination charges |
Request the bacs_debit_payments Capability
Platforms in the UK do not need to request the bacs_debit_payments capability for their UK Connect accounts when performing destination charges. Platforms in AT, BE, CH, DE, DK, ES, FI, FR, IE, IT, LU, NL, NO, SE, and PT may still process Bacs Direct debits for their UK Connect accounts; however, the UK Connect account must have the bacs_debit_payments capability enabled in this case.
In both scenarios, requesting the bacs_debit_payments capability is required if you want to use the on_behalf_of parameter. This will allow you to collect mandates using the connected accounts chosen display name, and have that name appear on statement descriptors. There is a £50 monthly fee for each account using custom branding.
Request Bacs Direct Debit capabilities for your custom Connect accounts.
Custom Branding
You can customize your customer’s bank statements, Stripe Checkout, and customer emails for direct debits to show your business name by upgrading to Custom Branding. You can enable Custom Branding in your Bacs Direct Debit settings.
Custom Branding is charged at £50 per active month. Your business name is shown for new mandates created 5 days after you collect your first Bacs mandate. If you want your custom branding to appear on mandates sooner than this, contact us.