CHAPS

Introduction to CHAPS

The Clearing House Automated Payment System (CHAPS) is a real-time gross settlement payment system used for payments in sterling in the UK. CHAPS payments are a type of bank transfer and used predominantly for large transactions and corporate treasury, while Bacs Direct Credit is more commonly used for mass retail payments. The scheme is one of the largest high-value payment systems in the world.

To learn about CHAPS and other UK payment schemes in more detail, see our deep-dive on UK bank payments.

• Year introduced: 1984
• ‍Operated by: Bank of England
• Maximum amount: No upper limit per payment (may vary by bank)
• ‍Availability: Monday to Friday between 06.00 and 18.00
• ‍Settlement: Same-day if submitted before 17.40 (may vary by bank)
• ‍Fee per payment: £20+

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How CHAPS works

Run by the Bank of England, CHAPS guarantees risk-free settlement and irreversible transactions for around 30 direct participants, namely large banks and payment providers. Businesses that use CHAPS access it exclusively through their banking partners, as opposed to participating in the scheme directly.

There’s no transaction amount limit for CHAPS payments and they’re typically used for larger financial transactions, such as settling money market and foreign exchange transactions, corporate payments to suppliers, and one-off purchases for things such as cars or houses.

The scheme is available on weekdays from 06.00 with participant banks required to begin receiving payments by 08.00. It closes at 18.00 for interbank transactions, while consumer payments must be submitted before 17.40 at the latest or they’ll settle on the next business day (some banks impose their own earlier cut-off time).

CHAPS leverages the Bank of England's real-time gross settlement (RTGS) infrastructure and the SWIFT messaging network to maintain high availability and reliability.

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Benefits and drawbacks of CHAPS

CHAPS offers a same-day settlement guarantee, provided that the payment is sent before the 18.00 cut-off time. There are no restrictions on the transaction amount for CHAPS payments.

On the other hand, CHAPS charges higher fees relative to other schemes – around £25 per transaction on average. Additionally, it is difficult if not impossible to cancel a payment once it has been made.