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 cheques, 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,[1] down from £73 trillion in 2008.[2]
CHAPS used to offer euro fund transfers, but this service closed on 16 May 2008.[1] The total value of these in 2007 was £57 trillion.[2]
As well as making transfers originated by banks themselves, CHAPS is frequently used by businesses for high-value payments to suppliers, and by solicitors and Licensed Conveyancers on behalf of individuals buying houses.[3]
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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 BACS) is sometimes a subject of controversy in the UK,[4] although low value transactions are now available from CHAPS from its Faster Payments Service.[5]
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.[3]
As of 2011[update] the members of CHAPS are:[6]
CHAPS clearing information relating to UK banks may be found in the Industry Sorting Code Directory.