CASHING IN
the service for business payments and large-scale financial transactions ( bank-tobank transfers ). The same-day settlement system is crucial for time-sensitive payments and certainty of fate .
CHAPS is a secure service through rigorous authentication processes . Transactions are encrypted to protect sensitive financial information , ensuring a safe environment for high-value payments whilst maintaining the integrity of the data .
What types of businesses are using CHAPS ?
CHAPS is accessed by 38 Direct Participants and many other financial institutions , companies and consumers via indirect access through their banks . To become and remain a CHAPS Direct Participant an organisation must meet a set of strict criteria and ensure they comply with all scheme rules . The CHAPS Direct Participant must regularly attest to the Bank of England that they are compliant with all CHAPS rules and requirements .
What about similar payment schemes ?
Historically , CHAPS was the only option for sending higher-value payments . However , since 2022 , payments up to the value of £ 1 million can now be sent via the Faster Payment System ( FPS ).
FPS is available 24 / 7 , 365 days per year , and can transmit a payment within seconds , although it can take up to two hours to be visible if there is an issue with the payment . FPS is more suitable for lower-value , larger-volume transactions . It has three settlement cycles throughout the business day , but CHAPS settles in real time via the Real-Time Gross Settlement ( RTGS ) system . As a result , there is no settlement liquidity risk in CHAPS .
CHAPS on the other hand currently only operates on business days Monday – Friday excluding bank holidays within set operating hours and for the Bank of England this is 06:00 – 18:00 . However , individual Financial Institutions will have their own operating hours within this window . While the costs are usually higher compared to FPS , CHAPS is routinely used because same-day settlement is crucial for certain transactions .
Key industry statistics
To give you an idea of the volumes and values of CHAPS , below are some Industry statistics .
• In 2023 CHAPS volumes grew by 0.5 % to a record 51.1 million with an average of 203,759 payments per day . This totalled a value of £ 91.5 trillion which is an average of £ 364.4 billion per day .
• In April 2024 , CHAPS processed 4.6 million payments worth £ 7.3 trillion over 21 settlement processing days . The average daily volume was 218,750 and the average daily value was £ 350 billion .
RTGS
In June 2023 there was a significant upgrade to the Real-Time Gross Settlement ( RTGS ) system . This introduced the global messaging standard ISO 20022 , which was created to enhance the resilience of the system and provide innovation . It also aligns the UK with international payment systems and to date over 70 countries having already adopted the standard .
ISO 20022 benefits
Though CHAPS is one of the oldest UK payment schemes , it ’ s constantly evolving . The most recent example was its transition to the ISO 20022 standard in 2023 .
ISO 20022 is a flexible standard for payments messaging that ’ s slowly being adopted worldwide with over 70 countries already supporting it . Creating a common global language for financial messaging improves interoperability between FIs , market infrastructures and other participants , and harmonises the international payment system .
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