What are BACS, CHAPS, and Faster Payments?

When it comes to transferring money between bank accounts in the UK, you have different options to choose from. The three main bank transfer solutions are BACS, CHAPS, and Faster Payments. In this article, we’ll break down what each of these systems offers and how they differ.

What Are BACS, CHAPS, and Faster Payments?

BACS (Bankers’ Automated Clearing System) is an electronic system that facilitates bank-to-bank transfers, specifically for direct debits and direct credits. It’s a reliable and widely-used method, particularly for recurring payments like salaries. However, BACS transfers aren’t instantaneous; they typically take about three working days to process. This slower processing time is suitable for regular payments but may not be ideal for urgent transactions.

CHAPS (Clearing House Automated Payment System) is designed for high-value, same-day transfers. If you need to move a significant sum of money quickly, CHAPS is often the preferred choice. However, this speed comes at a cost—transaction fees can range from £25 to £35, depending on your provider. Unlike BACS, CHAPS has no minimum transfer limit. This makes it a go-to solution for large, one-off payments, such as purchasing property or settling business invoices.

Faster Payments, as the name suggests, is designed for speed. It enables real-time transfers, with funds typically arriving within minutes, though sometimes it can take up to a couple of hours. While it’s convenient for everyday transactions, Faster Payments does have a limit on the amount you can send—usually less than £1 million, though this can vary depending on your bank.

What is the Difference Between BACS, CHAPS, and Faster Payments

• ⁠Speed: BACS transfers take up to three days, while CHAPS can be completed the same day, and Faster Payments are done instantly. 
• Cost: BACS is usually low-cost, CHAPS is more expensive due to its same-day service, and Faster Payments are generally free for smaller amounts but may incur fees for larger sums.
• Use Case: BACS is ideal for routine, non-urgent payments. CHAPS is best for large, high-priority transfers, and Faster Payments are perfect for quick, everyday transactions.

Why Geegpay is a Better Alternative for International Transfers

If you’re dealing with clients or business partners overseas, Geegpay offers a versatile solution. With Geegpay you can open instant multicurrency bank accounts in USD, GBP, EUR, and your local currency. You can send and receive money across borders seamlessly, without the delays and high fees often associated with traditional bank transfer methods. Geegpay also converts at market rates so you do not lose money to conversions. Additionally, the Geegpay virtual dollar card allows you to make international purchases and subscriptions with ease. Download the Geegpay app to get started.

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