Explained: CHAPS, BACS, Faster Payments & SWIFT

Samir Moussa
Software Engineer, rebank

This is one of those topics that we shouldn't really be talking about these days, as modern software and payment infrastructure initiatives have made moving money effortless and cost-effective. Today you can pay however much you want, whenever you want, wherever you want.

While understanding the details of fund transfer may be considered a fruitful exercise, it's definitely worth acknowledging that payment methods are gradually being "abstracted away" so that small business owners and finance officers can focus on matters more important than the technicalities of a payment rail. Rebank strongly supports this movement, which is why making payments with us anywhere around the world is super fast and super simple.

Nevertheless, in this post we'll take a look at the different types of payment methods between UK accounts and accounts in other countries, along with how they work and why one method is preferable over another. Answers to things like how long a bank transfer takes to clear is dependent on a few factors.

You might like

In business banking, there are a few ways to make a payment from one bank account to another, and each comes with its pros and cons.

CHAPS vs BACS vs Faster Payments vs SWIFT


What is a CHAPS payment?

CHAPS stands for Clearing House Automated Payment System and has been around for almost 30 years. It's used to send large amounts of money within the UK in a relatively short amount of time, when BACS is too slow and Faster Payments limits the payment amount.

How long do CHAPS payments take?

CHAPS guarantees same-day payment delivery by 5.30pm if initiated before 3pm. The payment should arrive before 5.30pm the next day if sent after 3pm. For some accounts like RBS Bankline, this limit is extended to 6.15pm if the beneficiary has an RBS sort code.

It's worth noting that major banks make the process a little more involved. For example, to send an HSBC CHAPS payment, you're required to manually fill out a form.

How much does a CHAPS payment cost?

CHAPS has no limit to how much you can send (depending on the bank), but transactions will cost upwards of £25, depending on the bank. For example, sending a Barclays CHAPS payment is free, assuming you don't pay the £20 to cancel or amend the payment and the receiving bank doesn't charge you for using CHAPS in the first place.

When should I use CHAPS?

CHAPS is used by businesses who have to pay large sums of money within a time-sensitive window, like deposits on an office or payments to a supplier. Solicitors and conveyancers of properties also tend to use CHAPS to settle transactions.

How does rebank fit in?

Transfer money internationally with low fees. Compare our pricing.

Receive seed funding in 36+ currencies.

Monitor, search and categorize transactions to get a handle on spend.

Finance for Founders Guide
Your finance stack, upgraded.
📚 50+ finance topics
📹 40+ videos
📝 10+ report templates
🎉 Excellent, we've sent you an email! You can also access the Notion guide here.
Oops! Something's not right. Is your email correct?


What is BACS?

BACS stands for Banker’s Automated Clearing Services. It's a payment system for clearing financial transactions between banks, building societies and other financial institutions in the United Kingdom, and it's the most common payment method for businesses.

How long does BACS take?

When considering CHAPS vs BACS, BACS payments are slower than CHAPS and Faster Payments, typically taking 3 business days to arrive. So if you make a transfer on Wednesday before 3pm, the receiving account will get the money on Friday. A BACS payment made on Friday will clear on Wednesday the week after, assuming there are no bank holidays in between.

But why the delay? Very much like 2nd class postage stamps, they're a cheaper option to move money around as a business.

How much does a BACS payment cost?

BACS payments are normally free but can cost a few pennies depending on the method you choose to set up BACS for your business. Going down the bank or bureau route, you're likely to pay hundreds to thousands of pounds in admin fees. When put against debit and credit card fees, BACS is cheaper per transaction.

When should I use BACS?

Recurring payments like standing orders or Direct Debits and payments like wages, pensions, etc. should go over BACS when same-day delivery isn't required.

Faster Payments

What is a Faster Payments payment?

First launched in the UK in 2008, it's available to all UK account holders of major banking institutions. It's designed for the instant delivery of many small electronic payments made online and works between any two bank or building society accounts that support Faster Payments. It supports three types of credit transfers — standing orders, scheduled payments and single immediate payments.

How long do Faster Payments take?

Faster Payments are virtually instant (a few seconds), but in rare cases take up to two hours to settle. Unlike other payment methods, you're able to send money on any day of the week, including bank holidays.

How much does a Faster Payments transfer cost?

It costs at least 50p, depending on your business banking provider, which makes it relatively more expensive.

When should I use Faster Payments?

Faster Payments has an upper limit of £250,000 per payment, so any quick, low-value mobile or B2C payments should utilise Faster Payments. If you plan to transfer over the limit amount but still want to avoid waiting a few days, CHAPS payments are a better option.


What is SWIFT?

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a network of cross-country financial institutions that allows international bank transfers from your UK bank account to accounts held abroad. Unlike other methods that facilitate the actual transfer of funds, SWIFT transmits payment orders that are processed by institutions that have an agreement with each other.

How long does a SWIFT payment take?

Because multiple banks are involved in processing funds, SWIFT payments can take 3 - 5 days to process, depending on the countries and institutions involved.

How much does a SWIFT payment cost?

Each intermediary bank will take a cut for processing the payment. If multiple currencies are involved, you'll also be paying some markup on the exchange rate per intermediary. This makes SWIFT payments very expensive — at least £25 per transaction.

When should I use SWIFT?

SWIFT payments can be a handy way to pay a supplier in a country where your bank doesn't have a presence. For example, the SWIFT network would handle EUR or USD payments sent to Germany.


The only time small businesses and start ups need to be acquainted with the intricacies of UK payment methods is when they're not using modern banking software tools and may not be cognisant about the business payment charges being placed on them by incumbent banking institutions. Let it be known — times have changed, and how you should pay has too.

Samir Moussa
Software Engineer, rebank

Know someone who needs to read this?

Rebank lets you upload batch files from Xero and pay multiple bills with one click.

Start for free