Breadcrumb

How to make a CHAPS payment

Written by

The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedApr 20222 min read

There are so many different ways to make and accept payments nowadays, from ACH payments to digital wallets to traditional bank transfers. Depending on the type of transaction that you are carrying out, a different payment method may be more appropriate. If you’re dealing with a high-value transaction, then it’s a good idea to look into making a CHAPS payment.

CHAPS payments can only be made in the United Kingdom with pounds sterling, and they are managed by the Bank of England. In fact, huge amounts of money flows through the CHAPS system on a daily basis, with estimates putting the figure at around £341 billion per day. Keep reading to find out about how to make CHAPS payment.

What is a CHAPS payment?

The acronym CHAPS stands for Clearing House Automatic Payment system, which was established in the 1980s and is now managed by the Bank of England.

Basically, they are a type of bank transfer that is used for transactions of a high value. Specifically, transactions must be over £10,000 to use the CHAPS system. For this reason, CHAPS payments are usually made by businesses or banks, although they may be used by individuals making a large purchase such as for house sales or cars.

An additional bonus of making a CHAPS payment is that the funds are guaranteed to arrive on the same day, as long as they are made before the agreed cut-off time. This is usually by 3.30pm if you’re making the payment in the branch, and 5pm if you’re making it online. If you miss this deadline, then funds will simply be sent on the next working day. This speed makes CHAPS payments a great option if you need to urgently send money.

How do I make a CHAPS payment?

Now that you know what they are, you might be wondering: “how do I make a CHAPS payment?” Well, they are relatively simple to make – you will just need basic information such as your account details, payment date and payment amount, as well as your payee’s details. Given the high value of transactions, you will also need to go through rigorous identity checks to ensure secure payments.

There are a number of different ways of making a CHAPS payment. You can do this over the phone, in person at your local bank branch, or online.

Who offers CHAPS payments?

If you’re wondering how to do CHAPS payments, you might also be curious about which banks offer this service. Nearly all UK banks are able to send and receive money by CHAPS, but not all of them are direct participants of the CHAPS system. However, this does not make any practical difference for your transaction, as banks will then use third-party sponsors to process the CHAPS payments for them.

Is there a fee when making a CHAPS payment?

Given the high value of the transactions and the speed of delivery, banks will usually charge a relatively high transaction fee for any CHAPS payment. These fees will vary depending on the specific bank that you use, but tend to be somewhere between £20-30.

In general, there is no limit to the amount of money that you can send through the CHAPS system. Transactions will need to be at least £10,000, and if you are sending a particularly large amount of money then you may be obliged to use CHAPS for this. For example, some banks might require that payments over £500,000 be sent via CHAPS.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.