CHAPS (Clearing House Automated Payment System) is a UK sterling same-day scheme that is used to settle high-value, wholesale payments; as well as time-critical, lower-value payments. Responsibility for the CHAPS system transferred to the Bank of England in November 2017.

Direct participants in CHAPS include traditional high-street banks, as well as a number of international banks. Many more financial institutions access the scheme indirectly and make their payments via direct participants.

CHAPS payments have several main uses:

• Financial institutions and some large, enterprise businesses use CHAPS to settle money market and FX transactions
• Corporates use CHAPS for high value or time-sensitive payments – i.e. supplier payments or for payment of taxes
• Solicitors often use CHAPS to complete housing and other property transactions
• Individuals may use CHAPS to buy high-value items – i.e. buy a car or pay a deposit for a house

Payment obligations between direct participants are settled individually on a gross basis in RTGS on the same day that they are submitted. Transfer of funds is also irrevocable between direct participants. The CHAPS system is open from 6am – 6pm each working day. Participants must be open to receive by 8am and must send by 10am, customer payments must be submitted by 5.40pm.

• Direct access to CHAPS supports secure and efficient provision of high value, same day payments from payment service providers to their customers. There is no minimum or maximum payment limit.
• High level of operational resilience based on the Bank’s real-time gross settlement infrastructure and the SWIFT messaging network.
• Settlement risk is eliminated between CHAPS direct participants, at the cost of an increased need for liquidity, making this model best suited to a high-value payment system with the largest potential systemic risk.