What is CHAPS?

Full Definition

CHAPS (Clearing House Automated Payment System) is a UK same-day electronic payment system used for high-value or time-critical transfers, most commonly by solicitors moving completion funds on a property purchase, but also for other large one-off payments such as buying a car, clearing a large debt, or moving significant savings between accounts. Unlike Faster Payments, CHAPS has no upper transaction limit and guarantees same-day, irrevocable settlement provided the payment is submitted before the bank's daily cutoff time (typically mid-afternoon on a working day), which is why it is the standard method for completing a house sale, where both sides need certainty that funds have arrived before legal title changes hands. CHAPS payments usually carry a fee, often £20-£35 depending on the bank, reflecting the same-day guarantee and the higher level of manual checking banks apply to large transfers as part of fraud prevention, and once sent a CHAPS payment cannot be recalled by the sending bank, so payment details are checked especially carefully beforehand.

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