CHAPS
Encyclopedia
The Clearing House Automated Payment System or CHAPS is a British
company established in London in 1984, which offers same-day sterling
fund transfers. CHAPS is a member of the trade organisation APACS
, and the EU-area settlement system TARGET
.
A CHAPS transfer is initiated by the sender to move money to the recipient's account (at another banking institution) where the funds need to be available (cleared) the same working day. Unlike with a bank giro credit, no pre-printed slip specifying the recipient's details is required. Unlike cheque
s, the funds transfer is performed in real-time removing the issue of float
or the potential for payments to be purposefully stopped by the sender, or returned due to insufficient funds, even after they appear to have arrived in the destination account.
CHAPS is used by 19 settlement banks including the Bank of England and over 400 sub-member financial institutions. In its first year of operation, average daily transactions numbered 7,000 with an annual value of 5 billion pounds sterling. In 2004, twenty years later, average daily transactions numbered 130,000 with an annual value of 300 billion pounds sterling. In 2010 there were 32 million CHAPS transations totalling over £61 trillion, down from £73 trillion in 2008.
CHAPS used to offer euro
fund transfers, but this service closed on 16 May 2008. The total value of these in 2007 was £57 trillion.
As well as making transfers originated by banks themselves, CHAPS is frequently used by businesses for high-value payment
s to suppliers, and by solicitor
s and Licensed Conveyancer
s on behalf of individuals buying houses.
) is sometimes a subject of controversy in the UK, although low value transactions are now available from CHAPS from its Faster Payments Service
.
Problems can arise from delays, e.g. when an exceptional workload at a bank results in the money being cleared too late in a working day to complete related transactions, or inadequate instructions, when a bank is not given sufficient information to know where to credit the money.
CHAPS clearing information relating to UK banks may be found in the Industry Sorting Code Directory
.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
company established in London in 1984, which offers same-day sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
fund transfers. CHAPS is a member of the trade organisation APACS
APACS
The UK Payments Administration Ltd is a United Kingdom trade organisation that brings together all payment systems organisations and gives banks, building societies and card issuers a forum where they can work together on non-competitive issues...
, and the EU-area settlement system TARGET
TARGET
TARGET was an interbank payment system for the real-time processing of cross-border transfers throughout the European Union. It included 16 national real-time gross settlement systems and the ECB payment mechanism...
.
A CHAPS transfer is initiated by the sender to move money to the recipient's account (at another banking institution) where the funds need to be available (cleared) the same working day. Unlike with a bank giro credit, no pre-printed slip specifying the recipient's details is required. Unlike cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
s, the funds transfer is performed in real-time removing the issue of float
Float (money supply)
In economics, float is duplicate money present in the banking system during the time between a deposit being made in the recipient's account and the money being deducted from the sender's account. It makes up the smallest part of the money supply....
or the potential for payments to be purposefully stopped by the sender, or returned due to insufficient funds, even after they appear to have arrived in the destination account.
CHAPS is used by 19 settlement banks including the Bank of England and over 400 sub-member financial institutions. In its first year of operation, average daily transactions numbered 7,000 with an annual value of 5 billion pounds sterling. In 2004, twenty years later, average daily transactions numbered 130,000 with an annual value of 300 billion pounds sterling. In 2010 there were 32 million CHAPS transations totalling over £61 trillion, down from £73 trillion in 2008.
CHAPS used to offer euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
fund transfers, but this service closed on 16 May 2008. The total value of these in 2007 was £57 trillion.
As well as making transfers originated by banks themselves, CHAPS is frequently used by businesses for high-value payment
Payment
A payment is the transfer of wealth from one party to another. A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation....
s to suppliers, and by solicitor
Solicitor
Solicitors are lawyers who traditionally deal with any legal matter including conducting proceedings in courts. In the United Kingdom, a few Australian states and the Republic of Ireland, the legal profession is split between solicitors and barristers , and a lawyer will usually only hold one title...
s and Licensed Conveyancer
Licensed Conveyancer
A Licensed Conveyancer is a specialist legal professional in the United Kingdom, New Zealand, Australia or South Africa who has been trained to deal with all aspects of property law.Typically, their tasks might include:...
s on behalf of individuals buying houses.
Costs and problems
CHAPS transfers are relatively expensive, with banks typically charging as much as £35 for a transfer. The cost of fast transfers and the slow speed of free transfers (such as BACSBACS
Bacs Payment Schemes Limited is a United Kingdom scheme for the electronic processing of financial transactions. BACS direct debits and BACS direct credits are made using the BACS system...
) is sometimes a subject of controversy in the UK, although low value transactions are now available from CHAPS from its Faster Payments Service
Faster Payments Service
Faster Payments Service is a UK banking initiative to reduce payment times between different banks' customer accounts from three working days using the long-established BACS system, to near real time...
.
Problems can arise from delays, e.g. when an exceptional workload at a bank results in the money being cleared too late in a working day to complete related transactions, or inadequate instructions, when a bank is not given sufficient information to know where to credit the money.
Members
the members of CHAPS are:- Bank of America Merrill LynchBank of America Merrill LynchBank of America Merrill Lynch is the corporate and investment banking division of Bank of America. It provides services in mergers and acquisitions, equity and debt capital markets, lending, trading, risk management, research, and liquidity and payments management...
- The Govenor and Company of the Bank of EnglandBank of EnglandThe Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
- Bank of ScotlandBank of ScotlandThe Bank of Scotland plc is a commercial and clearing bank based in Edinburgh, Scotland. With a history dating to the 17th century, it is the second oldest surviving bank in what is now the United Kingdom, and is the only commercial institution created by the Parliament of Scotland to...
Plc - Barclays Bank Plc
- CitibankCitibankCitibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
N.A. - CLS Bank International
- Clydesdale BankClydesdale BankClydesdale Bank is a commercial bank in Scotland, a subsidiary of the National Australia Bank Group. In Scotland, Clydesdale Bank is the third largest clearing bank, although it also retains a branch network in London and the north of England...
Plc - The Co-operative Bank Plc
- Danske BankDanske BankDanske Bank is a Danish bank. The name literally means "Danish Bank" It was founded 5 October 1871 as Den Danske Landmandsbank, Hypothek- og Vexelbank i Kjøbenhavn ....
A/S (Northern BankNorthern BankNorthern Bank , is a commercial bank in Northern Ireland. It is one of the oldest banks in Ireland having been formed in 1809. Northern Bank is considered one of the leading retail banks in Northern Ireland with 82 branches and four finance centres...
Ltd.) - Deutsche BankDeutsche BankDeutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
A.G. - HSBC BankHSBC Bank (Europe)HSBC Bank plc is one of the four major clearing banks in the United Kingdom and is a wholly owned subsidiary of HSBC Holdings. The business ranges from the traditional High Street roles of personal finance and commercial banking, to private banking, consumer finance as well as corporate and...
Plc - JPMorgan Chase & Co.
- Lloyds TSB Bank Plc
- National Westminster BankNational Westminster BankNational Westminster Bank Plc, commonly known as NatWest, is the largest retail and commercial bank in the United Kingdom and has been part of The Royal Bank of Scotland Group Plc since 2000. The Royal Bank of Scotland Group is ranked as the second largest bank in the world by assets...
Plc - The Royal Bank of Scotland Plc
- Santander UKSantander UKSantander UK plc is a wholly owned subsidiary of the Spanish Santander Group. Based in the United Kingdom, it operates under the name of Santander. Santander is the third largest bank in the UK in terms of deposits, the second largest in terms of mortgages held, and the fourth largest in terms of...
Plc - Standard Chartered BankStandard Chartered BankStandard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
Plc - UBS A.G.
CHAPS clearing information relating to UK banks may be found in the Industry Sorting Code Directory
Industry Sorting Code Directory
The Industry Sorting Code Directory is the definitive list of bank branches and sub branches in the United Kingdom. The directory is maintained by VocaLink on behalf of the UK Payments Administration Limited ....
.
External links
- CHAPS Clearing Company
- CHAPS page at the website of the UK Payments Administration