A quick guide to bank transfer mechanisms in the UK, including Bacs, CHAPS and Faster Payments

1. © Stuart Mitchell

2.  Full name: Bankers Automated Clearing Services
 Timescale: Within 3 working days
 Cost: Free
 Min/Max Limits: None
 Examples:
◦ Direct Debit (backed by the Direct Debit Guarantee) & Direct
Credit (i.e., regular payments of amounts that may vary -
not Standing Orders), e.g., salaries and bill payments
◦ One off payments, including telephone and online, where
Faster Payments (FPS) is not available
 Use by:
◦ Setting up a Direct Debit/Credit
◦ Requesting a transfer from an account that doesn’t allow
FPS

3.  Organisation: Bacs Payment Schemes
Automated Ltd
 Launch Date: 1968 (as Inter-Bank Computer
Bureau)
 Milestones:
◦ 1971 - Rebranded Bankers Automated Clearing
Services Limited
◦ 1983 - Launched BACSTEL moving mechanism from
magnetic tapes to telephone lines
◦ 1985 - Rebranded to Bacs Ltd
◦ 2005, Dec - Migration to BACSTEL-IP - moving
from telephone to internet mechanism

4.  Full name: Clearing House Automated Payment
System
 Timescale: Same day (if funds are sent before
3pm)
 Cost: Approx. £25-£35 per transfer
 Min/Max Limits: None (see cost)
 Examples:
◦ High value transfers such as buying property or a car
◦ Anything over the limit for FPS, inter bank transfers
 To use: Request transfer in branch using
identification for extra security

5.  Organisation: CHAPS Co
 Launch Date: 9 Feb 1984
 Milestones:
◦ 1992 - Minimum limits removed
◦ 1996, Mar - Real-Time Gross Settlement (RTGS)
launched
◦ 1999, Jan - Launched euro transfers
◦ 2008, May - Ceased euro transfers in response to
the launch of the TARGET2 system across EU
◦ 2011, Jul - Transfers reached £1 quadrillion

6.  Short name: FPS
 Timescale: Instant (within 2 hours)
 Cost: Free (in practice)
 Min/Max Limits: Varies, usually around £10k for
retail and £100k for corporate customers
 Examples:
◦ One-off personal transactions
◦ Standing Orders*
 To use:
◦ Request single transfer online, by telephone or in-
branch
◦ Direct Corporate Access (DCA) allows corporate
customers to submit bulk payments via the service using
secure IP verification

7.  Organisation:
◦ Faster Payments Scheme Limited
◦ Requested and governed by Payments Council (formed from a OFT
taskforce)
◦ Launched by UK Payments Association (formerly APACS)
◦ Briefly run by CHAPS
◦ Infrastructure built by VocaLink
 Launch Date: 27 May 2008
 Milestones:
◦ 2008, May - Control passed to CHAPS Co.
◦ 2009, July - First DCA payment made
◦ 2010, Sept - Upper limit set at £100,000
◦ 2011 - Control passed to new Faster Payments Scheme Limited
◦ 2011, end of - all BACS sortcodes able to receive FPS
*Satisfies the requirement that all internet, phone and SO payments
must be processed by the end of the next business day

8.  What is Bacs?
 What is CHAPS?
 What are Faster Payments?
 Bacs website
 CHAPS website
 UK Payments Administration (formerly APACS)