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BECS payments and how they work

BECS payments are different to wire transfers in how they process the payments. Both are electronic payments, with wire transfers being faster, as they send funds directly from one bank to another, but more expensive. 

BECS payments take longer as they go first to a BECS — a bulk electronic clearing system — where the transactions for that period are bundled, validated and processed. This makes them efficient, secure and low cost. Aside from the payments you make using an EFTPOS or credit card, the vast majority of electronic payments you make will go through a bulk electronic clearing system. 

In this guide, you'll learn more about Australia and New Zealand's bulk electronic clearing system, how the payments work and the pros and cons of using them.

What is a bulk electronic clearing system (BECS) payment?

A bulk electronic clearing system (BECS) payment is an electronic funds transfer that uses BECS. Paying your power bill online, direct debits collected by an insurance company or a business paying its staff are all examples of BECS payments. BECS payments don't include transactions made at EFTPOS or ATMs — these payments use a different system. 

How do BECS payments work?

BECS payments work by automatically moving funds from one account to another. Used in Australia and New Zealand, BECS pulls together hundreds or thousands of transactions into batches. After someone or an organisation makes an electronic payment, banks and other institutions aggregate all transactions over a period and submit them to the BECS.

The BECS then automatically sorts and clears the payments and updates the bank's overall financial position. This is why it can take a few hours or even a day for money to appear in the payee's bank account. 

Different types of BECS payments

There are three types of payments that use BECS – direct debits, direct credits and credit transfers. They can be B2B payments or B2C payments. 

Direct debits

Direct debits let organisations withdraw funds from your bank account without you having to set up the payment. They’re commonly used by companies who charge by subscription, like a gym membership or on a fixed schedule, like monthly finance repayments. 

Direct credits

Direct credit lets you pay multiple people or organisations in one batch rather than setting up each payment individually. Businesses that pay multiple staff members most often use this method. 

Credit transfers

Credit transfers are the kinds of payments that consumers will be most familiar with. You may log into your online banking to pay for that Trade Me purchase or set up a recurring payment to cover your rent each week.

Benefits of BECS payments

Benefits of BECS payments include low cost, flexibility and control with a high level of security.

Low-cost payments

Low-cost payments come with the territory with BECS. They don't involve any EFTPOS or credit card processing, only transfer between bank accounts, and the fees are lower than other kinds of payments. 

High level of security 

A high level of security is built into the BECS system. It uses protocols such as encrypting and restricting access to sensitive data, with regular audits and testing to uncover weak spots. A rigorous clearing process ensures each transaction is legitimate and that the funds are going to the right place. 

Control and flexibility

Control and flexibility are part of why BECS payments have become the norm for people and businesses. For most, making a payment is as simple as logging into your online or mobile banking. BECS payments are also reversible if you spot an error.

Disadvantages of BECS payments

The disadvantages of BECS payments are that funds can be slow to clear and they aren’t suitable for large transactions. 

Processing can take up to three days

Processing can take up to three days for BECS payments although most of the time, funds will appear in your account on the same day. 

Geared towards smaller transactions

Geared towards smaller transactions, BECS payments are ideal for everyday, lower-value transactions. Large transactions, like house settlements, use the high value clearing system (HVCS), which is fast but can't be reversed.

What's the difference between a BECS payment and a wire transfer?

The difference between a BECS payment and a wire transfer is that a wire transfer sends funds directly from one bank to another. BECS payments are sent first to a BECS, which pulls together hundreds or thousands of transactions into batches before they're cleared. Wire transfers are faster than BECS, but are more expensive and aren't reversible.

BECS payment FAQ

How long does BECS payment processing take? 

Processing can take up to three days for BECS payments although most of the time, funds will appear in your account on the same day. The delay is because most banks will stop processing funds on Friday afternoon and won't start again until the following Monday.

What are the fees associated with BECS payments? 

The fees associated with BECS payments will vary, but many pay a fee per transaction, for the account setup and ongoing, and for any dishonourings, amendments or cancellations.

Where are BECS payments available? 

BECS payments are available only in Australia and New Zealand. 

BECS is your best bet

Unless you're paying by card, making one big payment or transferring money instantly overseas, you'll likely be making BECS payments. Fast, simple and low cost, BECS payments in Australia and New Zealand keep the economy ticking over. 

Whatever kind of payment you make, MYOB will help you keep track of what's coming in and going out – get started with MYOB today!

Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.

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