What is the difference between BACS and CHAPS?

What is the difference between bacs and chaps

Friday, 26 November 2021, 2 minute read

BACS (Bankers Automated Clearing System) and CHAPS (Clearing House Automated Payment System) are UK businesses' most common bank transfers. It allows two companies to transfer either low or high payments at a much faster clearance speed. Additionally, you can also schedule payments for the foreseeable, depending on your payment options.  

Because of their similarities, it's somewhat challenging to tear them apart. To break down the difference easier, see the below explanations. 

BACS (Bankers Automated Clearing System)

BACS is the most common bank transfer payment method in the United Kingdom, reaching billions of transactions every year. The main characteristics of BACSs are that it's used for smaller payments (under £1,000,000), takes around two to three business days for the transaction to clear, and has highly inexpensive transfer fees (between 5p to 50p per transaction).  

CHAPS (Clearing House Automated Payment System  

CHAPS was designed to transfer high-value transactions that are time-sensitive. With this payment method, you'll only be allowed to transfer sterling and no other currencies. For this reason alone, it permits CHAPS to be a much faster transaction.  

The main attributes of CHAPS are that they're expensive (anywhere between £25 to £35 each transaction), funds can be transferred same day (apart from after 3 PM), and there's no minimum or maximum payment limit.   

If you've ever made a direct debit or credit transaction, you've undoubtedly used a BACS payment method.  

As you can see, both payment methods follow a similar structure, and they're just specially designed to help particular types of transactions. To summarise the above information, we're going to break down three of the essential factors within a bank transfer – transfer fees, time, and amount.  


The above is an overview of the main characteristics that both BACS and CHAPS bank transfers offer. To gain a better conclusion of each of these, see the below CHAPS vs BACS:  

  • Transfer fees – When it comes to fees, CHAPS isn't the friendliest choice compared to BACS. With these, you're expected to pay anywhere around £25 to £35 for each transaction, much more than the 5p to 50p fees charged by BACS.  

  • Transfer time – However, when you need to deposit funds quickly (same day), CHAPS is the most prestigious option. With this transferring method, you'll receive either the transaction same or the next working day (if funds are sent after 3 PM). In comparison, BACS is around two to three business days.   

  • Transfer amount – Lastly, CHAPS payments can transfer much higher amounts as there isn't a limit. Compared to the £1,000,000 limit on BACS payments, it's evident that CHAPS is a much more prominent option when transferring significant funds.  

When comparing both CHAPS and BACS, many people misunderstand their purposes. The best way to look at this is that a CHAPS is a much faster transaction, can be delivered the same day and is expensive. Whereas BACS is slower (two to three days), inexpensive, but it does have a transfer limit of £1,000,000. Therefore, if your payment isn't time-sensitive and under £1,000,000, it's a much more prominent option.    

Crezco can help

We process account-to-account payments for free and settle them instantly. They’re more secure than card payments and we can process higher amounts, up to £1,000,000 per transaction. Find out about how Crezco works, why we’re free, and how we can help you by getting in touch.

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