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Published 11 February 2021
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CHAPS Payments: How They Work

CHAPS is the UK payment system used for transferring large sums of money which are cleared on the same day. We explain how it works and when to use the service.

If you need to transfer a large amount of money, with the guarantee that the recipient will get it on the same day, you can use CHAPS.

It stands for The Clearing House Automated Payment System which was first set up in 1984. It is used both to transfer large sums of money between companies but consumers may also use them for time-critical large transfers of money – when you are buying a house, for example.

Here we look at everything you need to know about CHAPS:

What is a CHAPS payment?

A payment made through CHAPS can be any kind of money transfer made between two different organisations or individuals. The money will be transferred to the recipient’s bank account and cleared for them to access on the same day.

While anyone can use this service, on the whole these payments tend to be used for high-value money transfers between different companies such as high street banks. If individuals are using this system it’s usually for transferring over large sums of money such as when buying a house or car.

There is no limit to the amount of money that can be transferred through the system.

How do CHAPS payments work?

Payments sent via the CHAPS system are guaranteed to arrive on the same day.

In order for this to happen the money needs to be sent before a cut-off time which is usually around 3.30pm if made by phone or in a bank branch, or before 5pm if made online. If the money isn’t transferred by this time it will usually happen on the next working day.

Different banks may have different cut-off times so if you’re planning on making this kind of payment you’ll need to check these times in advance.

Why would you need to use CHAPS?

There could be a number of reasons why you would use a CHAPS payment but the most common for individuals is transferring a large sum of money when buying a house or car.

The other option would be to use the faster payments system, whereby payments are transferred instantly. However, while the overall limit for faster payments is £250,000 many banks have lower limits, sometimes as low as £10,000.

They are often used by solicitors and conveyancers when a house sale is completed. This is because there is usually a specific time or date by which a large amount of money needs to be transferred.

Large corporate companies or financial institutions may use the system to make large foreign exchange transactions or for time-sensitive payments which are of a high value, such as a tax bill.

How can you set up a payment with CHAPS?

You can make a CHAPS payment online, over the phone, or in a bank branch but always check what your bank requires in advance.

If you’re doing it online you will usually need to log into your online banking, select the option of making a bank transfer and choose the CHAPS option if you need to make a same-day payment and it’s over the limit allowed by the faster payments system. You will then need the details of the person you are transferring the money to, including their name, bank address, sort code, and account number.

Who offers CHAPS payments?

Most UK banks offer CHAPS payments. To find out if yours does, you can check with it – either on the phone, in a branch, or on its website. The scheme has 30 direct participants, which are largely made up of UK banks and financial institutions.

What’s the difference between CHAPS, Bacs, and faster payments?

The three main payment systems in the UK are CHAPS, Bacs, and faster payments. Which one you use will depend on the reasons for transferring your money and the sum involved.


  • Same-day high-value money transfers
  • The money isn’t available immediately but will be transferred the same day as it’s sent
  • Usually used for buying a house or car
  • Cost around £25 – £30 per transaction


  • Direct debit or direct credit payments
  • Take three working days to clear
  • Free of charge for consumers

» MORE: Bacs: What It Is And How To Make a Payment

Faster Payments

  • Instantly transfer money to another account
  • Limit of £250,000 per transaction, although many banks set lower limits
  • There usually aren’t any extra fees for a customer when sending a faster payment

» MORE: Faster Payments: What You Need To Know

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