UK’s Electronic Payments System CHAPS Marks 30th Anniversary

The UK’s high value same-day Clearing House Automated Payment System – aka CHAPS – is about to mark its 30th anniversary, having come into operation on 9 February 1984.

Thirty years on, CHAPS processes significantly larger values than any other UK payment system and handles over 92% of all intra-bank payments by value in the UK.

CHAPS initially applied a minimum payment level of £10,000 (US$16,300) at a time when the average daily total value was around £5bn from a daily volume of 7,000 payments. The minimum payment level was later reduced and subsequently abolished in 1993.

By 2013, CHAPS was processing payments with an average daily total value of £277bn and volume of 138,000 payments. Whilst the vast majority of CHAPS payments are for high value payments between banks and large corporates, CHAPS is most commonly used by British consumers when buying houses.

Among the facts issued by CHAPS to mark its anniversary:

  • In 2012-13 the average payment value via CHAPS was £2.1m, but with 78% below £100,000.
  • CHAPS’ highest ever settlement figure in one day was for £446bn on 28 September 2007, during the early part of the financial crisis.
  • CHAPS is one of the key payment methods for the housing market, replacing the use of cheques over the past three decades.
  • Many businesses rely on CHAPS for urgent supplier payments – one example is its use by insolvent companies that need to reassure suppliers.
  • CHAPS serves 4,500 indirect participants – these are banks or other financial institutions (FIs) such as building societies that process payments via direct participants.
  • A key high value use of CHAPS transfers is the money markets, short-term lending between FIs, foreign exchange (FX) and derivative-related payments.

Five international banks have signed up to join the scheme during 2014 and 2015. The company also plans to introduce an affiliate group that will allow indirect participants, industry bodies and software vendors to have a direct communication with CHAPS.

Affiliates will be given the opportunity to understand and help shape both CHAPS’ existing operations and its future strategy. The affiliate group will be launched in the second quarter of 2014.

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