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CHAPS vs. BACS Payments: What's the Difference?

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CHAPS payment stands for Clearing House Automated Payment System. CHAPS typically guarantees same-day transfers, provided they were initiated before the daily cut-off time. It is often used if the transfer is time-sensitive or is high-value.

BACS payment stands for Bankers Automated Clearing System. BACS is typically used for low-value, non-urgent or recurring transactions such as payroll and direct debits, which can take up to three business days to clear.

The main difference between CHAPS and BACS is that CHAPS provides faster processing for higher-value transactions but at a higher cost, whereas BACS processes slower, lower-value transactions at a lower cost.

When you are making payments or wire transferring money in the UK, you may have come across the terms CHAPS or BACS payment, as these methods are commonly used for bank-to-bank payments in the UK.

For people outside of the UK, it is common to be unfamiliar with these terms. 

Whether you have a business partner in the UK asking about BACS or CHAPS payments, recently opened a UK bank account, manage GBP with access to local systems like BACS or CHAPS, or are in any other situation, you've come to the right place for clarification.

In this article, we will cover what CHAPS and BACS payments are, discuss their differences and features, and help you determine which one is most suitable for your needs.

What Are CHAPS Payments?

CHAPS payments are an electronic payment system used to transfer money from one bank account to another bank account in a different bank on the same day. It is the primary method used in the UK for time-sensitive and high-value payments, such as putting a downpayment on a house, making an urgent supplier payment, purchasing a car, or acquiring any other large assets.

The CHAPS system is regulated under the FSBRA or the Financial Services (Banking Reform) Act and overseen by the Bank of England.

According to UK Finance, 48 million CHAPS payments were processed in 2021, worth a total of 86 trillion pounds. In Q1 2024, 12.7 million CHAPS payments were processed. The biggest factor influencing the number and volume of CHAPS payments is the UK's economy. 

CHAPS is an abbreviation of "Clearing House Automated Payment System."


Tip: Find out more in our guide to CHAPS payments.

What Are BACS Payments?

BACS payments are electronic bank-to-bank transfers that allow individuals and businesses to move funds between bank accounts.

BACS payments are processed in batches and can take up to 3 - 5 working days to clear. They are commonly used for payroll, direct debits, and other regular payments, as well as for one-time transactions such as paying bills or making purchases.

According to Pay UK,  the total BACS direct credit volumes in 2023 were 1.95 million. For direct debits, the total transaction was 4.8 million. Additionally, 1.665 billion BACS payments were processed during the first quarter of 2024.

BACS payments are generally considered a safe and reliable method of transferring funds, as they are backed by the UK's banking industry and regulated by the Financial Conduct Authority (FCA). 


Tip: BACS stands for "Bankers Automated Clearing System"

Difference Between CHAPS and BACS Payments

The main difference is that CHAPS payments are faster but more expensive, typically preferred for high-value, critical transactions. On the other hand, BACS payments are slower and cheaper, commonly used for regular, smaller value transfers.

When deciding which payment method is the most suitable to use for sending money, it conclusively stirs toward the intention of the transfer with the consideration of these factors.





Same-day if the payment is initiated before the cut-off time.

Around 2-5 business days.


High-value payments without strict limits unless individual banks impose their own restrictions.

Lower-value transactions.

There is a ceiling per each unique transfer, which varies by bank, usually GBP 250,000.

Number of recipients

Often, single payments to individual recipients. 

Multiple payments in a batch.


Higher, around GBP 15 to GBP 35

Banks may charge a setup fee to access CHAPS.

Lower, around 10p to 50p

Banks may charge setup fees and additional service fees.


Typically accepted from 7 am to 5:30 pm, but cut off-time can be as early as 1-3 pm. 

Typically accepted between 7 am and 10:30 pm.


Irreversible once processed.

BACS may offer some options for cancellation or recall.


Supervised by the Bank of England in a secure network for approved institutions.

Managed by Pay.UK and subjected to PSR security standards

Ideal for

Urgent, high-value payments such as property deposits and critical business purchases.

Regular or lower-value payments to multiple recipients, such as for payroll, dividends, and refunds.


Tip: BACS and CHAPS are primarily used for domestic money transfers within the UK. For international transfers, consider telegraphic transfer or SWIFT payment methods.

Let's explore the details in crucial aspects.


Transaction Speed

In terms of transaction speed, CHAPS payments are a faster payment method because they are usually processed on the same day, as long as the request was initiated before the cut-off time.

On the other hand, BACS payments can take up to 3 to 5 business days to process. Funds are typically credited to the recipient's account on the clearing day.


Transaction Volume and Limits

CHAPS payments are the option for larger transfers. There is no maximum limit for CHAPS payments unless specific banks impose their own restrictions. In some cases, certain banks or financial institutions may require the use of CHAPS for transfers exceeding a specific threshold amount.

BACS payments are suitable for smaller sums of money. They can also be used to pay smaller amounts to multiple payees in batches or bulk, such as for payroll.

BACS has a maximum limit that varies by bank, typically ranging from GBP 100,000 to GBP 250,000 per unique transaction. Checking with your bank is necessary to find out the exact limit.


Number of Recipients

CHAPS is designed for high-value transactions typically sent to a single recipient.

On the other hand, a BACS transaction accommodates bulk payments, with each BACS capable of including multiple 'lines', each representing an individual payment, similar to how multiple items are listed on an invoice.

There's flexibility in the number of lines per transaction, as long as the payment amount is below the transaction limit.



BACS payments are the cheaper method of payment of the two as BACS transfer cost ranges from 10p to 50p (HKD 1.08 to 5.41) per transaction, and in some cases, banks may charge extra additional service fees.

To use BACS, you'll need to apply for an identification number called a SUN. Banks may charge a fee for this application.

In contrast, CHAPS payments are more expensive. You can expect to pay the range from GBP 15 to GBP 35 per transaction. Furthermore, not all banks provide the CHAPS service, and you may incur a fee to activate it. 

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Note: Fee structures may vary by institution. 



The Bank of England stated that the CHAPS system is available from 6 am to 6 pm on weekdays, except for bank holidays in England and Wales. However, the actual availability of CHAPS services to customers varies between banks and is typically from 7 am to 5.30 pm.

The cut-off times for CHAPS transactions are generally 1 pm for telephone banking, 3 pm for in-person transactions, and 5 pm for online transactions. It is advisable to confirm the specific cut-off times with your bank.

BACS transactions are typically accepted between 7 am to 10:30 pm.



Once a CHAPS payment has been debited from your account, it cannot be changed or cancelled. If the payment is scheduled for a future date, you may be able to contact your bank to request cancellation.

In contrast, you have the chance to cancel a BACS payment after it has been debited. To do so, contact your bank at least one working day before the scheduled payment date. Your bank will require specific details to initiate the payment recall. 

If you realise the error after this deadline, consult your bank and then contact the recipient directly. Always monitor your bank statement to confirm that the payment has been successfully halted.



CHAPS is closely supervised by the Bank of England and operates within a secure, restricted network limited to approved financial institutions. While partner institutions may assist in facilitating transfers, CHAPS transactions are processed directly between these approved banks, limiting potential entry points for unauthorised access. The system is regulated under the Financial Services (Banking Reform) Act (FSBRA).

On the other hand, BACS is managed by Pay.UK and meets strict security standards set by the Payments Systems Regulator (PSR). Individual financial institutions participating in BACS should be regulated by the Financial Conduct Authority (FCA).

Benefits and Drawbacks of CHAPS

After exploring all the definitions and comparisons, here’s the conclusion on the benefits and drawbacks of CHAPS.


  • Instant clearing and guaranteed same-day transfers, if initiated before the cut-off time
  • Designed for high-value transactions. No upper limit.


  • Strict cut-off time
  • Difficult to cancel
  • Higher fees than other methods
  • Not all banks offer CHAPS

How to Use CHAPS

To use CHAPS, begin by checking availability. Not all banks offer CHAPS, so contact your bank to confirm if they provide this service. Once confirmed, you’ll need to gather the recipient's bank details, including their name, account number, and sort code.

Typically, you can initiate a CHAPS payment using online banking, telephone banking, by post, or by visiting a branch, depending on your bank's policies.

Ensure your CHAPS payment is initiated during your bank's operating hours to guarantee same-day processing. 

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Note: It’s best to verify your bank’s specific CHAPS cut-off time, as payments are typically not processed after 3 pm.

Benefits and Drawbacks of BACS

After reviewing all the definitions and comparisons, here's a summary of the advantages and disadvantages of BACS payments.


  • Lower transaction fees compared to CHAPS and Faster Payments
  • Efficient for processing multiple payments at once (e.g., salaries)


  • Not suitable for urgent payments
  • Slower transfer speed
  • A lower limit on transaction amount compared to CHAPS

How to Use BACS

To start using BACS for payments, begin by requesting a BACS Service User Number (SUN) from your bank. A SUN is a six-digit identifier used to facilitate and record transactions in the BACS payment system.

Next, initiate BACS payments through online banking, telephone banking, or by submitting a paper form to the bank. 

You will need to gather the necessary details of the payee: their name, bank account number, sort code, and bank name. Depending on your bank's security measures, you may need to provide additional confirmation, such as a security code, to complete transactions securely. 

BACS payments allow for multiple transactions to different recipients by adding separate lines for each transaction.

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Note: Planning the payments in advance is crucial with BACS transactions to ensure timely processing.

Should You Use CHAPS or BACS? 

To summarise, let's outline when to use CHAPS and when to use BACS.

Use CHAPS if

  • You need the money to arrive on the same day. This is crucial for time-sensitive transactions, including property deposits and any urgent payments.
  • You're transferring a high-value amount. CHAPS has no upper limit.
  • The security and finality of the transfer are paramount. CHAPS offers guaranteed payments as long as the transaction is initiated before the cut-off time.
  • You are a large business handling the money market and foreign exchange transactions.

Use BACS if

  • You're making a regular payment. BACS is ideal for salaries, subscriptions, or recurring bills.
  • You're transferring a low to medium amount. BACS is more cost-effective for smaller transactions.
  • There's no urgency, and you can wait 2-5 business days for the transfer to clear.
  • You need a cost-effective payment method. 

Your business can use both methods. For instance, you might use BACS for regular payments to employees and CHAPS for larger, occasional payments. 

You can also use other alternative methods, like FPS or cheque, as you see fit. 

An Alternative Option to CHAPS and BACS

Faster Payment System (FPS)

Faster Payments System (FPS) was introduced in 2008 as a new method of payment to replace the traditional BACS payment.

FPS is an electronic payment processing method that enables near-instantaneous payments amidst bank accounts, often completed within minutes or even seconds.  

It allows individual payments of up to GBP 1 million. However, organisations offering this service may impose their own limits.

BACS, CHAPS, and the Faster Payment System dominate UK payment transactions.


According to Pay UK, FPS processed 1.255 billion payments in Q2 of 2024.

In Hong Kong, FPS is also a popular payment method due to its convenience and efficiency. HKMA states that there are over 12 million FPS registered users in Hong Kong.

How Statrys Can Help

It's important to ensure your business has an account that can easily send and receive payments.

If your business is registered in Hong Kong, Singapore, or the BVI and you need a solution to manage transactions in GBP and other foreign currencies, consider using Statrys.

Statrys is not a bank but a payment service provider that offers a multi-currency business account in Hong Kong. This account supports 11 currencies, including GBP, EUR, USD, HKD, and other major currencies.

Here is a summary of Statrys’ services.  

Business Account Opening Requirements

Must be incorporated in Hong Kong, Singapore, or the BVI.

Multi-Currency Business Account

Hold, receive, and send money in 11 currencies: GBP, EUR, USD, HKD, CNY, AUD,   SGD, JPY, CHF, NZD, and CAD.

Local Payments

Send local payments in 12 currencies: GBP, AUD, EUR, IDR, INR, KRW, PHP, SGD, THB, TRY, USD, and VND

SWIFT Payments & Tracking


FX Rate and Fee

Competitive exchange rates with FX fees as low as 0.15%

Payment Cards

Physical and virtual cards

Monthly Fee

Free (if 5 or more outgoing transfers are made in the month)

Customer Support Channels

Website Live Chat, Email, Phone, WhatsApp, and WeChat

Company Registration Service

100% online Hong Kong and Singapore company registration.

Trustpilot Score

4.7/5, based on 293 Trustpilot reviews. [Retrived on 25 June 2024]

A dropdown of some supported currencies by the Statrys business account.


What is CHAPS?

CHAPS is primarily used for single, large payments from one bank to another.

What are CHAPS and BACS Payments?


What is BACS?


Which payment method is faster: CHAPS or BACS?


Which payment method is more cost-effective: CHAPS or BACS?


Do all UK banks accept CHAPS payments? 


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