What is a CHAPS payment?

Written by Rebecca Goodman

Reviewed by Collette Shackleton

5 min read

Updated: 16 Jan 2025

In this guide / article

Need to transfer a substantial sum of money? The CHAPS system allows urgent, large sums to be transferred. Here’s how it works.

Key points

CHAPS is a UK-based payment system intended for urgent, high-value transactions
Payments through CHAPS take place on the same day and there isn’t an upper limit on the amount transferred
Making a CHAPS transfer involves visiting a bank or using online banking to provide recipient details and confirm the transaction
CHAPS differs from BACS by offering immediate clearance and is typically used for significant transactions like property purchases

What is a CHAPS payment?

CHAPS stands for Clearing House Automated Payment System. It is a bank transfer method used primarily for large sums of money.

This system is widely used in the UK for transactions which need immediate clearing. The key benefit of CHAPS is that payments are usually processed on the same working day. This makes it ideal for urgent and high-value transfers, such as when you buy a property.

How do CHAPS payments work?

CHAPS payments begin when you provide your bank with the required payment details. Once these details are received, your bank uses the CHAPS system to process the transaction.

This system ensures that funds are transferred quickly and securely between banks, allowing for immediate financial transfers.

How do I make a CHAPS transfer?

Initiating a CHAPS transfer is straightforward if you follow these steps:

You can either visit your local bank branch or log into your online banking account

You must supply the recipient's account number, sort code, and account name. Double check these details to prevent errors during the transfer process

After providing all necessary information, review the transaction to ensure everything is accurate. Confirming these details finalises the transfer. The funds should then be processed according to CHAPS timelines

1. Visit your bank in person or use online banking services

2. Provide recipient's details and amount to transfer

3. Confirm the transaction details to complete the transfer

What is the difference between CHAPS and BACS?

When comparing CHAPS with BACS, one key difference is the transaction speed.

CHAPS ensures same-day completion, ideal for urgent, high-value transfers, while BACS payments may take up to three days, so is more suitable for non-urgent transfers.

CHAPS is often chosen for high-value transactions like property purchases or large corporate movement of funds.

Conversely, BACS is used for regular payments such as direct debits and payroll, due to its efficiency for recurring transactions.

Is there a payment limit with CHAPS?

When using CHAPS, there's no upper limit on the amount you can send. This is ideal for high-value transactions like purchasing property or settling large business deals.

However, individual banks might set lower limits based on customer agreements or specific policy requirements.

These limits can vary from one bank to another. It's advisable to check with your bank to understand any restrictions that may apply to your account.

Will I have to pay fees on a CHAPS transfer?

When you initiate a CHAPS transfer, banks generally impose a fee, which typically ranges from £25 to £30.

The exact cost may vary depending on your bank and the type of account you have. For premium account holders, some banks waive this fee.

Are CHAPS payments safe?

CHAPS payments are known for their robust security measures. They facilitate direct bank-to-bank transfers, significantly reducing fraud risks.

These transactions are direct and closely monitored. Each step is rigorously checked for irregularities.

Additionally, CHAPS systems undergo regular audits by financial authorities, such as the Financial Conduct Authority (FCA). This maintains stringent security standards and trust in this payment method.