A bank giro credit is a type of document used in the United Kingdom. It is used as part of a bank transfer process, alongside a cherub or cash payment. The term is most commonly associated with a now outdated form of social security welfare payment.
The bank giro credit is used in the paper equivalent of an electronic money transfer. It is not a payment instruction, but rather a piece of paper containing information needed to transfer money from one account to another. This paper allows either the payer or payee to provide more information than would be communicated on a paper check itself.
The most common form of giro credit in use today is on paper bills from utility companies. This appears as a tear-off slip at the bottom of the bill. The customer then either returns this slip in the mail along with a check, or takes it to a bank or post office to make a payment by check or cash.
This type of bank giro credit contains details not only of the amount of the due payment and the name of the utility company, as would appear on a check, but further information such as the customer reference number for the company and, most importantly, the bank sort code and account number for the account the company uses to receive payments. This serves two purposes. Firstly it makes sure the payment goes to the correct account. Secondly, it helps identify the customer making the payment in case of confusion.
The other main use of the bank giro credit is better known as a paying-in slip. This is contained either at the back of a checkbook or in a separate book of tear-out slips. These slips are pre-printed with the details of the customer's account. The customer then either hands this to the clerk when paying cash or checks into her account, or includes it with the cash and checks in an envelope that is placed into a special dropbox at the bank.
Historically, the giro credit was used for social security payments. Rather than the government handing over cash to recipients, it would mail a "giro-check" to the person receiving the welfare payment. The person would then take the giro-check and proof of identity to a post office, where it would be exchanged for cash. The document, and the welfare payment itself, were colloquially known as "the giro."