What is the difference between BACS and CHAPS payments?

BACS (Bankers' Automated Clearing Services) processes bulk payments in batches taking 1-3 working days and is suitable for regular payments like salaries and supplier payments. CHAPS (Clearing House Automated Payment System) provides same-day transfers for urgent, high-value payments but costs more per transaction.

How long do BACS payments take to process?

BACS payments typically take 1-3 working days to process. The exact timing depends on when you submit the payment and your bank's processing schedule. Payments submitted before the cut-off time are usually processed within 3 working days.

When should I use CHAPS instead of BACS?

Use CHAPS for urgent, same-day transfers such as property purchases, large supplier payments that can't wait, or when you need guaranteed same-day settlement. CHAPS is more expensive but essential for time-critical high-value transactions.

What are the cost differences between BACS and CHAPS?

BACS payments are typically much cheaper, often costing pennies per transaction or included in business banking packages. CHAPS payments cost significantly more, usually £15-£30 per transaction, reflecting the same-day processing and higher service level.

Can I set up regular BACS payments for my business?

Yes, BACS is ideal for regular payments like monthly salaries, supplier payments, and subscription services. You can set up standing orders or use Direct Debit facilities to automate recurring payments, making cash flow management easier for your business.

Are BACS and CHAPS payments secure for business use?

Both BACS and CHAPS are highly secure payment systems regulated by the Bank of England and protected by robust security measures. They use encryption and authentication protocols to ensure safe transmission of funds and are trusted by UK businesses for daily operations.

What information do I need to make BACS or CHAPS payments?

You'll need the recipient's full name, bank account number, sort code, and a payment reference. For international payments or additional security, you may also need the recipient's address. Always verify these details to prevent payment errors.

Can I track BACS and CHAPS payments once sent?

Yes, most business banking platforms provide tracking for both BACS and CHAPS payments. You can monitor payment status, confirm when funds have been debited from your account, and verify successful receipt by the recipient through your online banking system.

What are BACS and CHAPS payments?

Published Apr 13, 2021

Last updated Jan 29, 2026

5 min read

Written by Jordan MaceyAAT

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CHAPS-an abbreviation for Clearing House Automated Payment System-is a same-day bank-to-bank payment system. It is typically used for large, one-time payments, as the transfers are relatively expensive to process. There are no upper or lower limits to the amount that can be transferred. BACS, or Bankers' Automated Clearing Services enables payments to be made electronically from one bank to another. The transfer method handles all debit and credit card transactions, has an upper limit of £250,000 per transfer and is mainly used for low-value transactions. BACS payments take three working days to clear.

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What are BACS and CHAPS payments?

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