A Quick Guide to Bank Transfers

© Stuart Mitchell

Full name: Bankers Automated Clearing Services Timescale: Within 3 working days Cost: Free Min/Max Limits: None Examples:

◦ Direct Debit (backed by the Direct Debit Guarantee) & Direct Credit (i.e., regular payments of amounts that may vary - not Standing Orders), e.g., salaries and bill payments

◦ One off payments, including telephone and online, where Faster Payments (FPS) is not available

Use by:◦ Setting up a Direct Debit/Credit◦ Requesting a transfer from an account that doesn’t allow FPS

Bacs

Organisation: Bacs Payment Schemes Automated Ltd

Launch Date: 1968 (as Inter-Bank Computer Bureau)

Milestones: ◦ 1971 - Rebranded Bankers Automated Clearing

Services Limited◦ 1983 - Launched BACSTEL moving mechanism from

magnetic tapes to telephone lines◦ 1985 - Rebranded to Bacs Ltd◦ 2005, Dec - Migration to BACSTEL-IP - moving from

telephone to internet mechanism

Bacs

Full name: Clearing House Automated Payment System

Timescale: Same day (if funds are sent before 3pm)

Cost: Approx. £25-£35 per transfer Min/Max Limits: None (see cost) Examples:

◦ High value transfers such as buying property or a car◦ Anything over the limit for FPS, inter bank transfers

To use: Request transfer in branch using identification for extra security

CHAPS

Organisation: CHAPS Co Launch Date: 9 Feb 1984 Milestones:

◦ 1992 - Minimum limits removed◦ 1996, Mar - Real-Time Gross Settlement (RTGS)

launched ◦ 1999, Jan - Launched euro transfers◦ 2008, May - Ceased euro transfers in response to

the launch of the TARGET2  system across EU◦ 2011, Jul - Transfers reached £1 quadrillion

CHAPS

Short name: FPS Timescale: Instant (within 2 hours) Cost: Free (in practice) Min/Max Limits: Varies, usually around £10k for

retail and £100k for corporate customers Examples:

◦ One-off personal transactions◦ Standing Orders*

To use: ◦ Request single transfer online, by telephone or in-branch◦ Direct Corporate Access (DCA) allows corporate customers

to submit bulk payments via the service using secure IP verification

Faster Payments

Organisation: ◦ Faster Payments Scheme Limited◦ Requested and governed by Payments Council (formed from a OFT

taskforce)◦ Launched by UK Payments Association (formerly APACS)◦ Briefly run by CHAPS◦ Infrastructure built by VocaLink

Launch Date: 27 May 2008 Milestones:

◦ 2008, May - Control passed to CHAPS Co.◦ 2009, July - First DCA payment made◦ 2010, Sept - Upper limit set at £100,000◦ 2011 - Control passed to new Faster Payments Scheme Limited◦ 2011, end of - all BACS sortcodes able to receive FPS

*Satisfies the requirement that all internet, phone and SO payments must be processed by the end of the next business day

Faster Payments

Further Information What is Bacs? What is CHAPS? What are Faster Payments? Bacs website CHAPS website UK Payments Administration (formerly

APACS)