Parents can pay their invoices through Famly in several different ways. This guide explains how each payment method works, when to recommend each one, and what to expect, so you can help parents choose the option that best suits them.
Payment Method Comparison
Below is an overview of how the different payment methods compare.
Payment method | Money arrives in your bank | Fees (UK)** |
BACS Direct Debit | 4–5 business days* | £0.50 |
Debit card / credit card | 1–2 business days | 1.5% + £0.20 |
Credit card (non-UK/Amex) | 1–2 business days | 3.5% + £0.20 |
Tax-Free Childcare | 0–1 business day for payments under £2,000 and | Free |
SEPA (Ireland) | 8–10 business days | €0.60 |
*If the mandate is already active. If not, an extra 3 business days apply for mandate verification. For the full breakdown, see Payment Timelines and Payouts
**Fees excluding VAT
BACS Direct Debit (UK)
How it works
BACS Direct Debit authorises Famly to collect fees directly from parents' bank accounts.
The Direct Debit setup process
Before a parent can use Direct Debit, they must complete a one-time setup:
The parent adds their bank details in Famly
Famly sends the Direct Debit mandate to their bank for verification
The bank verifies the mandate, which usually takes 3 business days. However, parents can start using their BACS payment method right away
Automatic payments
If the parent is enrolled in automatic payments, Famly initiates the payment on your scheduled payment day. The payment takes 4 business days to process, and you receive your payout 1 business day later.
Manual payments
Parents can also choose Direct Debit when paying manually when clicking Pay now in their Balance tab, enter their BACS details (or use a saved BACS direct debit payment method). The same processing timeline applies.
Important to know about BACS Direct Debit
BACS Direct Debit is a common payment method for childcare fees and is often a good option for settings that want to keep payment fees low.
Key things to be aware of:
Requires a one-time setup: Parents cannot pay immediately when they first add Direct Debit, as the mandate must be verified by their bank. This usually takes 3 business days.
Slower processing: Once active, Direct Debit payments typically take around 4 business days to complete.
UK bank accounts only: This option is only available to parents with a UK bank account.
Disputes cannot be challenged: If a parent disputes a BACS payment through their bank, the funds are automatically returned under the Direct Debit Guarantee. For more information, see Handling Refunds and Disputes.
Debit and Credit Cards
How it works
Card payments work like standard online card payments and are familiar to most parents.
Manual payments
Parents can click Pay now in their Balance tab, enter their card details (or use a saved card), and complete the payment instantly. You will typically receive the payout 1 business day later.
Automatic payments
Parents can save their card details and opt in to automatic payments. Famly will then charge the card automatically on your scheduled payment day. Card payments process instantly, and you will typically receive the payout 1 business day later.
Important to know about debit and credit card payments
Card payments are one of the fastest and most familiar payment options for parents. They work similarly to other online card payments, and they are often a good choice when parents need to pay quickly.
Key things to be aware of:
Instant processing: Card payments complete immediately.
Fast access to funds: Payouts typically reach your account within 1 business day.
Instant confirmation: You can see straight away whether the payment has been successful.
No setup delay: Parents can pay immediately without waiting for mandate verification.
Supports quicker debt collection: Faster processing can reduce the time spent chasing overdue balances.
Fewer delays compared to Direct Debit: Instant processing reduces uncertainty and waiting time.
Familiar to parents: Card payments are widely used and may encourage more parents to use in-app payments.
Apple Pay and Google Pay
Parents using Famly on a browser (not the mobile app) can pay using Apple Pay, Google Pay, or Link from Stripe. These options do not change the payment method itself. They just allow parents to use securely saved card details for a quicker checkout, and the same card fees apply as for standard payments.
Tax-free Childcare
How it works
Tax-free Childcare is a government scheme that gives parents a 20% top-up on childcare payments. Once enabled, parents can link their Tax-free Childcare account to Famly and pay directly using their balance.
The TFC setup process
You enable Tax-free Childcare in your in-app payment settings (see the TFC Setup Guide)
Parents link their Tax-free Childcare account to Famly
Parents enter their child’s unique reference code
Parents can then pay using their Tax-free Childcare balance
Payment processing timelines
Payments under £2,000 process via Faster Payments, and usually arrive within 2 hours during banking hours
Payments over £2,000 process via BACS and usually arrive in 3–4 business days
Tax-free Childcare payments appear individually on your bank statement as “NS&I” (National Savings and Investment Bank)
Important to know about Tax-free Childcare
Tax-free Childcare can be a valuable payment option for both settings and parents, particularly for families who regularly use government support. Key things to be aware of when using TFC:
Fast processing for most payments: Many Tax-free Childcare payments are processed quickly.
Fast access to funds: Payments under £2,000 can arrive in your bank account within 2 hours during banking hours.
Financial benefit for parents: Parents receive a 20% government top-up, which can make your nursery fees more affordable.
Encourages timely payment: Parents are often motivated to use funds they have already set aside in their Tax-free Childcare account.
For full TFC setup guidance, see Tax-free Childcare Setup and Management.
SEPA Direct Debit (Ireland Only)
How it works
SEPA (Single Euro Payments Area) Direct Debit works similarly to BACS Direct Debit, but is used for eurozone countries. It is only available for settings based in Ireland.
Key differences from BACS
Mandate verification takes 3 business days, the same as BACS
Processing time is slower and typically takes 7–8 business days
The fee is €0.60 per transaction
When to use SEPA
This option is only relevant if your setting is in Ireland and accepts payments in euros.
Manual vs Automatic Payments
Parents can pay either manually or through automatic payments, depending on what they prefer.
Manual Payments
How it works
Parents choose when to pay. They open Famly, click Pay now, select a payment method, and the payment is processed.
When parents may prefer manual payments
Manual payments may be better for parents who:
Prefer control over when payments are made
Have irregular income
Want to review each payment before it goes through
Prefer actively managing their finances
💡 Direct debit payments are authorised once by the parent, and then collected from their bank account when a payment is due. While debits can technically be initiated manually, in Famly they are normally collected automatically based on billing schedules
Automatic Payments
How it works
Parents opt in once. Famly then charges their saved payment method automatically on your scheduled payment day. Parents receive an email notification 3 days before the payment is taken, and they can opt out at any time.
When parents may prefer automatic payments
Automatic payments may be better for parents who:
Prefer a set-it-and-forget-it approach
Have regular, predictable income
Want to avoid missing payment deadlines
Do not want to keep track of payment dates
Your Payment Run Schedule
You control when automatic payments run. This schedule applies to all parents who opt in.
You can choose:
Weekly, on the same day each week
Monthly, on the first working day, last working day, or a specific date
On the invoice due date, meaning payments are taken when invoices become due
For guidance on configuration, see Set Up Automatic Payments.
Related Articles
If you would like to explore specific payment topics in more detail, the articles below provide additional guidance on setup, troubleshooting, and day-to-day payment management. These can also be useful to share internally with staff who support bill payers.
In-app Payments - Complete Setup Guide
A full walkthrough of enabling in-app payments and configuring payment settings.Payment Timelines and Payouts
A detailed breakdown of when payments are processed and when funds arrive in your bank.Set Up Automatic Payments
Guidance on configuring automatic payment schedules and how automatic payments work for parents.Tax-free Childcare Setup and Management
How to enable Tax-free Childcare, support parents, and troubleshoot common issues.Troubleshooting Payment Issues
Common payment errors and how to resolve failed or incomplete payments.Handling Refunds and Disputes
What to do if you need to refund a payment or respond to a dispute or chargeback.