Definition of BACS. BACS stands for Bank Automated Credit System. Basically, it is a way for customers to electronically pay bills and transfer money from the banking system, without having to write cheques and take out money.
BACS was invented by Dennis Gladwell in 1968, he wanted to make it easier for banks to transfer money without having to draw up paper contracts.
In 2003, BACS Payment Schemes Limited (BPSL) was split from BACS limited and set up as a non-profit organisation to transfer money.
Criticisms of BACS
It is argued that the transfer of money is too slow given today’s technology. BACS was investigated by the Office of Fair Trading and they reported that a more efficient service should be introduced. It is hoped in the future, electronic transfers will be completed within 3 hours.