How CHAPS works
A direct participant sends each payment instruction over the SWIFT network, and the Bank of England settles it in RTGS, one payment at a time, on the day it is submitted. Because every payment settles gross, settlement risk between direct participants is removed, at the cost of needing more liquidity during the day.
The system is usually open from 6am to 6pm, Monday to Friday, except bank or public holidays in England and Wales. Customer payments must be submitted by 5.40pm, and the system closes at 6pm for bank-to-bank payments.
Who uses CHAPS
- Financial institutions settling money market and foreign exchange transactions
- Companies making large or time-sensitive payments, to suppliers or for taxes
- Solicitors and conveyancers completing property purchases
- Individuals buying a car or paying a deposit on a house
Direct and indirect access to CHAPS
The Bank of England lists over 35 direct participants, and several thousand other institutions make CHAPS payments through one of them. A direct participant holds a settlement account at the Bank and meets the rules of the CHAPS Reference Manual; the Bank puts the typical time to join at twelve to eighteen months. Most payment firms therefore reach CHAPS indirectly, through a direct participant.
CHAPS, Faster Payments or Bacs?
- Faster Payments
- Real-time payments of up to £1 million, available day and night. CHAPS has no upper limit but runs only on working days.
- Bacs
- Bulk payments on a three-day cycle: salaries and Direct Debits.
Where CHAPS shows up in a platform
Modules that do the work
- Accounts & IBANsCustomer accounts with their own IBANs, on the partner bank and the rails you choose.
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
Platforms that need it
Guides that go deeper
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.