CHAPS is a UK system for sending high-value sterling payments that settle the same working day. It has no upper limit and is run by the Bank of England, which makes it common for property purchases and other large one-off transfers.
In one line: CHAPS moves large sterling sums same-day with no maximum limit, and is typically used for house purchases.
How CHAPS works
A CHAPS payment is processed in real time through the Bank of England settlement system on working days, so cleared funds reach the recipient the same day when the instruction is sent before the daily cut-off.
A buyer completing a 320,000 GBP house purchase often sends the balance by CHAPS so the seller's solicitor receives guaranteed funds on completion day. Banks usually charge a fee of around 20 GBP to 30 GBP per payment.
Because settlement is immediate and irrevocable, CHAPS suits time-critical, high-value transfers where certainty on the day matters more than avoiding a fee.
CHAPS vs Faster Payments vs BACS
CHAPS is same-day, high-value and usually carries a fee. Faster Payments is near-instant and free but capped per transaction. BACS takes about three working days and is used for batch payments like salaries.
For most everyday transfers Faster Payments is enough; CHAPS becomes relevant when the amount exceeds a bank's Faster Payments limit or guaranteed same-day settlement is required.
Primary source: Bank of England: CHAPS