Clearinghouse Automated Payment System (CHAPS) - Explained
What is the CHAPS System?
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Table of ContentsWhat is the Clearing House Automated Payments System?How Does the Clearing House Automated Payments System Work?Direct Participants in CHAPS
What is the Clearing House Automated Payments System?
Clearing House Automated Payments System (CHAPS) is a computerized system that is used for the settlement of sterling transactions. CHAPS facilitate same-day cheque clearance and funds transfer for sterling and Euro. CHAPS was established to foster trading of the European currency, it started operations in 1984. When there is a need to move funds from one account to another within the same day, CHAPS transfer is used. CHAPS is a clearing system within the Association for Payment Clearing Services (APACS). It has fair charges and eradicates time wastage during transfer.
How Does the Clearing House Automated Payments System Work?
Clearing House Automated Payments System (CHAPS) has 19 member banks, and over 400 participating banks, also referred to as sub-member institutions. CHAPS charges an average fee of 30 pounds for each transfer. Not only does this system facilitate the trading of the European currency, but it also disallows senders from rescinding payments. As of 2004, the average transactions recorded by CHAPS were about 130,000 transactions per day which were approximately 300 billion pounds sterling.
Direct Participants in CHAPS
CHAPS has about 19 settlement banks that use it for sterling funds transfer, this is alongside over 400 participating banks that use this system. The direct participants of CHAPS include; Bank of England, Bank of America N.A. (London), BNP Paribas SA (London), Standard Chartered Bank plc, The Co-operative Bank plc, The Co-operative Bank plc, Citibank N.A. (London branch), ClearBank Limited, Bank of China Limited (London), Bank of New York Mellon (London), Barclays Bank plc, Bank of Scotland plc, Clydesdale Bank plc, Santander UK plc, and many others.