Short Definition:
CHAPS is the UK's payment system for same-day, high-value sterling transfers, with no upper limit on the amount sent.
Full Explanation:
Operated by the Bank of England, CHAPS settles payments individually in real time between banks rather than batching them, which is why it's the default choice for time-critical, high-value transactions like property completions and large B2B settlements. Unlike Faster Payments, it isn't designed for everyday small transfers — banks typically charge a flat fee per CHAPS payment (commonly £20–£40) and it only runs on business days within set operating hours. Oversight is moving from the Payment Systems Regulator to the FCA as part of the wider payments regulation consolidation currently before Parliament.
In Practice:
A UK SMB completing a property purchase or paying a six-figure supplier invoice that absolutely must clear same-day will use CHAPS rather than Faster Payments, accepting the higher fee in exchange for the certainty and lack of a value cap.
Acronym:
CHAPS
Related Terms:
Source Link:
https://www.bankofengland.co.uk/payment-and-settlement/chaps
Last Reviewed:
20260726
