Understanding CHAPS Payments | MoneySuperMarket

What is a CHAPS payment?

Written by Victoria Russell

Reviewed by Jonathan Leggett

5 min read

Updated: 18 Nov 2024

In this guide / article

Need to transfer a substantial sum of money? Read our guide to get up to speed with CHAPS payments and ensure a smooth and secure transaction

Key points

CHAPS is a UK-based payment system intended for urgent, high-value transactions, ensuring same-day fund processing without 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, which is processed quickly and securely
CHAPS differs from BACS by offering immediate transaction clearance and is typically used for significant transactions like property purchases, whereas BACS is suited for regular, non-urgent payments

What is a CHAPS payment?

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

This system is widely used in the UK for transactions needing 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.

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:

Visit your bank in person or use online banking services: You can either visit your local bank branch or log into your online banking account
Provide recipient's details and amount to transfer: You must supply the recipient's account number, sort code, and account name. Double-check these details to prevent errors during the transfer process
Confirm the transaction details to complete the transfer: 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

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.