CHAPS

CHAPS is a sterling same-day system that is used to settle high-value wholesale payments as well as time-critical, lower-value payments like buying or paying a deposit on a property.

What is CHAPS (Clearing House Automated Payment System)?

Responsibility for the CHAPS system transferred to the Bank of England in November 2017.

CHAPS is one of the largest high-value payment systems in the world, providing efficient, settlement risk-free and irrevocable payments. There are over 30 direct participants and over five thousand financial institutions that make CHAPS payments through one of the direct participants. 

The CHAPS Clearing Company website has been archived by The National Archives.

View the archived CHAPS Co website

Who uses CHAPS?

Direct participants in CHAPS include the traditional high-street banks and a number of international and custody banks. Many more financial institutions access the system indirectly and make their payments via direct participants. This is known as agency or correspondent banking.

CHAPS payments have several main uses:

  • Financial institutions and some of the largest businesses use CHAPS to settle money market and foreign exchange transactions
  • Corporates use CHAPS for high value and time-sensitive payments such as to suppliers or for payment of taxes
  • CHAPS is commonly used by solicitors and conveyancers to complete housing and other property transactions
  • Individuals may use CHAPS to buy high-value items such as a car or pay a deposit for a house

CHAPS Direct Participants

Banco Santander, S.A. (London branch)
Bank of America N.A. (London branch)
Bank of China Limited (London branch)
Bank of England
Bank of New York Mellon (London branch)
Bank of Scotland plc (part of the Lloyds Banking Group)
Barclays International (a trading name of Barclays Bank plc, part of the Barclays Group)
Barclays UK (a trading name of Barclays Bank UK plc, part of the Barclays Group)
BNP Paribas SA (London branch)
Citibank N.A. (London branch)
ClearBank Limited
CLS Bank International (an Edge Act Bank based in New York)
Clydesdale (a trading name of Clydesdale Bank plc, part of the Virgin Money UK PLC Group)
Danske Bank (a trading name of Northern Bank Limited, part of the Danske Bank Group)
Deutsche Bank AG (London branch)
Elavon Financial Services DAC (UK branch)
Euroclear Bank SA/NV (Brussels Head Office)
Goldman Sachs Bank USA (London branch)
Handelsbanken plc (a UK subsidiary of Svenska Handelsbanken AB)
HSBC Bank plc (part of the HSBC Group)
HSBC UK Bank plc (part of the HSBC Group)
ING Bank N.V. (Amsterdam Head Office)
J.P. Morgan Chase Bank N.A. (London branch)
LCH Limited
Lloyds Bank plc (part of the Lloyds Banking Group)
National Westminster Bank plc (part of the NatWest Group)
Northern Trust Company (London branch)
Royal Bank of Scotland plc (part of the NatWest Group)
Santander UK plc (part of the Banco Santander Group)
Societe Generale (Paris Head Office)
Standard Chartered Bank plc
State Street Bank and Trust Company (London branch)
The Co-operative Bank plc
TSB Bank plc
UBS AG (London branch)
Virgin Money (a trading name of Clydesdale Bank plc, part of the Virgin Money UK PLC Group)

How does CHAPS work?

Payment obligations between direct participants are settled individually on a gross basis in RTGS on the same day that they are submitted. The transfer of funds is irrevocable between the direct participants.

Operating hours: The CHAPS system opens at 6am each working day. Participants must be open to receive by 8am and must send by 10am. CHAPS closes at 6pm for bank-to-bank payments. Customer payments must be submitted by 5.40pm. 

The process of initial CHAPS payment request to SWIFT messaging network, which gets sent to the Bank of England for confirmation, then onto crediting customers account

What are the benefits of CHAPS payments?

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.

Requirements for Direct Access to CHAPS

To become and remain a CHAPS direct participant an organisation must meet certain criteria.

An organisation must:

  • Hold an account at the Bank which may be used to settle payment obligations. Account access criteria are set out in the Bank’s Settlement Account Policy
  • Be a participant within the definition set out in the Financial Markets and Insolvency Regulations 1999
  • If domiciled outside England and Wales, provide information about company status and settlement finality through a legal opinion
  • Comply with technical and operational requirements, including those set out in the CHAPS Reference Manual, on an ongoing basis

The Bank operates a ‘trust and verify’ approach. Direct Participants must self-attest to their compliance with the CHAPS rules and requirements, and declare instances of non-compliance. The Bank may also seek to verify certain areas. 

Technical requirements include access to the SWIFT network compromising one or more BICs, use of SWIFT FIN Copy, appropriate interfaces to connect to the SWIFT network and process messages. Other important components are access to an Enquiry Link facility provided by the Bank and the Extended Industry Sort Code Database which is supplied by VocaLink.

Gaining access to CHAPS

The number of CHAPS direct participants increased by over 50% between 2015 and 2020 reducing risks to financial stability. The Bank regularly reviews its access policies to support wider access, including to support a more innovative and competitive market in payments, subject to where we can safely do so without impairing financial stability.

The Bank, as operator of CHAPS, and a number of other UK payment system operators have published information to help organisations consider whether direct or indirect access best suits their needs. 

Direct access to CHAPS

The typical timeline for joining CHAPS is around twelve to eighteen months from an initial meeting. Applicants must demonstrate their ability to meet the eligibility criteria set out in the CHAPS Reference Manual and comply with the technical and operational requirements. This is through a self-attestation model as well as technical testing. Applicants are also expected to provide information on their business model and rationale for seeking direct access to the CHAPS payment system. The Bank undertakes a series of risk assessments based on this information, including ahead of allocating a joining date. 

The Bank is currently undertaking a major programme to renew the RTGS service including adopting the ISO 20022 messaging standard for CHAPS payments from June 2022 – initially on a like-for-like basis, with enhanced data from February 2023; and a new core ledger in September 2023. Each change requires technical preparation, including change freezes to the current RTGS infrastructure to safely deliver the necessary changes. 

The renewed RTGS service will be built to support a substantial increase in the number of CHAPS direct participants – with a simpler and more proportionate joining process than now. For example, testing will be streamlined for new joiners as well as existing CHAPS direct participants. 

Given the changes underway, the number of slots available to join CHAPS has reduced during the transition period to the renewed RTGS service. The final slots ahead of the introduction of a new core ledger for RTGS in September 2023 have been allocated. The next available joining date for CHAPS is unlikely to be before early 2024. In the meantime, we continue to welcome expressions of interest for direct access to CHAPS from eligible organisations who want to understand the relevant rules and future technical requirements with a view to being ready to join from 2024 onwards. 

If you would like to know more about direct access to CHAPS please contact rtgschapsaccess@bankofengland.co.uk

Indirect access to CHAPS

For those interested in indirect access, the Access to Payments website includes a list of Indirect Access Providers and details of their offerings.

Cost of Direct Access to CHAPS

The cost of direct participation in CHAPS includes one-off set-up costs, such as the cost of developing the necessary hardware, software and processes to connect to CHAPS and establishing sufficient expertise amongst staff. They also involve a potentially significant level of ongoing cost, such as fees and other participation costs; opportunity costs of providing collateral or holding liquid assets; hardware and software maintenance; and higher staffing costs. 

We charge CHAPS Scheme fees to Direct Participants with an annual participant charge and a per-item fee. We do not charge a joining fee but certain costs, such as external legal fees, may be recovered from Direct Participants.

Other costs that CHAPS Direct Participants can expect to incur are:

  • VocaLink charges for status changes within the Extended Industry Sort Code Directory (EISCD)
  • SWIFT tariff fees and charges for CHAPS payment and advice messages
  • Regulatory fees, including from the Payment Systems Regulator
  • Hardware and software costs such as a payments gateway or using the services of a technical aggregator 

CHAPS payments for customers

Indirect participants access the CHAPS system through one of the Direct Participants based on a commercial and contractual arrangement. The Direct Participant makes and receives payments on behalf of indirect participants and other customers including business and individuals. 

  • In 2015, the Payment Systems Regulator found that indirect participants typically pay around £2 to £3 per CHAPS payment, with a maximum of £30. End-users typically pay between £25 and £30.

Engagement with CHAPS users

We undertake a range of layered engagement and communication with CHAPS users. This covers financial institutions with direct and indirect access to CHAPS as well as end-users. 

Strategic Advisory Forum

We host a CHAPS Strategic Advisory Forum. This is a small focused group to discuss, and provide feedback and advice on, the strategic direction of CHAPS with the Bank. It is chaired by Kevin Brown, one of the independent members of the CHAPS/RTGS Board and meets 4 times a year.

The Forum’s fourteen external members are senior, experienced executives with a good understanding of the broad interests of their sector.  The members are drawn from banks, other financial institutions, payment service providers and end-users. However, membership is in an individual capacity, not as a direct representative of their respective organisations. 

Communicating with users

We are committed to giving appropriate voice to users in how we govern the CHAPS system. While the Strategic Advisory Forum has a vital role to play, we appreciate there is a large and diverse population of stakeholders with different interests.

We will communicate with CHAPS users through a layered approach. Some communication will come directly from us. Communication will include two-way engagement for us to seek views from, and respond to, users. In some instances, we will engage through other organisations, such as trade associations, to effectively reach a wider population.   

Board minutes from the CHAPS Clearing Company (the previous operator) are available through The National Archives or via chapsenquiries@bankofengland.co.uk

View the Board documents

CHAPS statistics

Last month

  • In August 2021, CHAPS processed 3.8 million payments worth £6.5 trillion over 21 settlement processing days.
  • The average daily volume was 180,390, an increase of 11.0% from August 2020. The strong year-on-year growth in CHAPS volume in August 2021 is in line with the continued recovery towards pre-pandemic levels.
  • The average daily value was £312 billion, a decrease of 10.2% from August 2020 and below the equivalent month in 2019.

First half of 2021

  • In the first six months of 2021, the average daily volume was 189,033 an increase of 8% from January - June 2020.
  • In the first six months of 2021, the average daily value was £341 billion, a decrease of 6% from January - June 2020.

Last year

  • In 2020, CHAPS volumes declined by 8.5% to 44.5 million; on average 175,346 per day.
  • CHAPS volumes were affected by the Covid-19 pandemic. 
  • The total value transmitted in CHAPS in the 12 months to December 2020  grew by 10.2% to a record £91.9 trillion; on average £361.8 billion daily.

CHAPS record days

  • Volumes: Thursday 29 March 2018, the day before the Easter break, and the last working day of the quarter, saw a record 320,034 payments, worth £463bn, beating the 11-year record by 38,000 (13%). Ongoing steady growth in CHAPS volumes over the previous five years outstripped migration to newer alternative methods of payment.
  • Values: The all-time peak value day was on 30 November 2020, when £485 billion was settled in CHAPS. In November, there was a confluence of high activity across many of the markets served by CHAPS, including unsecured money markets, settlement of foreign exchange, and flows with other financial market infrastructure. This new record exceeded the previous record of £479 billion on 18 March 2020.

CHAPS in context

  • CHAPS represents 0.5% of UK total payment volumes but 93% of total sterling payment values (excluding internalised flows within payment service providers).
  • CHAPS turns over the annual UK GDP every 5 working days.

Market effects

  • CHAPS volumes have been in decline year-on-year from 2020 Q2 onward, largely due to the economic disruption caused by the outbreak of Covid-19. CHAPS volumes have since increased in line with economic recovery.
  • They have also grown as the property market recovered from deep decline earlier in the year, supported by the Stamp Duty holiday. By 2020 Q4 CHAPS use in the property market was estimated to be only slightly below the levels in 2019 Q4. In February and March 2021 the property market was very active, sustained by the Stamp Duty holiday. The holiday was due to finish at the end of March; in early March it was announced it would extend until end June (tapered thereafter until end September 2021). The net growth in CHAPS volume in March 2021, the first year-on-year growth since February 2020, is primarily explained by CHAPS use in the property market.
  • CHAPS values in 2020 were largely reflective of financial market conditions. CHAPS value rose particularly during the early stages of the pandemic, and remained above 2019 levels for the rest of 2020. Although many financial market settlements were on other FMIs (i.e. non CHAPS) or in different currencies, net sterling flows to and from FMIs that were made over CHAPS grew substantially. The total value of short-term lending (money markets) payments in CHAPS was also considerably higher in 2020, after a decline in 2019. 
  • Most of CHAPS value (73% in 2020; 74% in 2019) continued to be derived from wholesale financial transactions. Value growth in 2020 was in both corporate (and other non-interbank) and in wholesale financial use, though stronger in the former than the latter (+12% versus +9%).

The two reports above (quarterly and annual UK payment system statistics) are reported on behalf of CHAPS and the other payment system operators by the Data and Analytics team at Pay.UK. Please contact them on 020 3217 8720 or by email inform@camis.org.uk for monthly statistics, previous reports or with other queries about these reports. For enquiries about CHAPS statistics: please contact the Bank of England press office on 020 3461 4411 or by email press@bankofengland.co.uk.

CHAPS Volumes for the previous 12 months

CHAPS Volumes for the previous 12 months

CHAPS Values for the previous 12 months

CHAPS Values for the previous 12 months
This page was last updated 02 September 2021

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