BACS, CHAPS, and Faster Payments: Which Should You Accept?

The Three UK Bank Transfer Systems

System	Clearing Time	Limit	Cost	Best For
BACS	3 working days	No limit	Free	Routine payments
Faster Payments	Same day (usually 2 hours)	£1 million	Free	Urgent payments
CHAPS	Same day (guaranteed)	No limit	£20–£30 per transfer	Large, urgent payments

BACS (Bankers' Automated Clearing Services)

The traditional system. Takes 3 working days but very reliable.

• Most common for routine payments
• Fully automated
• Zero cost to user
• Can be recalled if there's an error

Faster Payments

Modern system. Clears in hours, not days.

• Usually clears within 2 hours
• Free to use
• Limit: £1 million per transfer
• Harder to recall (irreversible once processed)
• Most businesses prefer this for invoices

CHAPS (Clearing House Automated Payment System)

Premium system. Guaranteed same-day arrival, suitable for very large amounts.

• Same-day guarantee (before 3 PM cutoff)
• Expensive: £20–£30 per transfer
• For large, time-critical payments only
• Mainly used by corporates and banks

Which Should You Accept on Your Invoice?

Accept all three. Let the client choose their method. Most will use Faster Payments (fast and free).

FAQ

If they pay via BACS, do I have to accept it?

Yes. BACS is the standard and free. You can't refuse it.

What if they send CHAPS? Do I have to reimburse them the fee?

No. That's their choice and cost. You don't pay bank fees for money they send you.