Are BACS, CHAPS and Faster Payments the Same as Bank Transfers?
play_circle

Are BACS, CHAPS and Faster Payments the Same as Bank Transfers?

What's the difference between BACS, CHAPS, and Faster Payments? Here's what you need to know about all three types of bank transfer, and why we use Faster Payments at Coconut.

The Coconut Team
The Coconut Team
No items found.

Are they the same thing?

The short answer is: yes!

There are three types of bank transfers in the UK: BACS, CHAPS, and Faster Payments. They simply have different processing times. Here's what you need to know:

Faster Payments

Faster Payments is the UK's payment service for immediate payments. This is available 24 hours a day, 7 days a week. As long as the receiving bank or building society uses Faster Payments too, the payment will arrive almost immediately (though sometimes, it can take up to 2 hours).

BACS

BACS stands for Bankers Automated Clearing Services, and is the standard payment type in the commercial world. A BACS can be a direct debit or direct credit.

A BACS payment takes three business days to clear. The BACS process begins with the payment file being submitted to the BACS system, prior to a cut-off time.

On the second day, the file is processed by the bank. On the third day, the payment is credited to the recipient’s bank account.

A BACS transfer, also known as BACS direct credit, normally arrives very early in the morning on the third day by about 7am.

BACS transfers only send Monday to Friday; even though it is an electronic payment system, it takes non-working days off.

CHAPS

These are payments to UK accounts that are guaranteed to arrive on the day you make them, as long as you set up the payment before a cut off time: usually 3.30pm. If you set up the payment after the cut-off time, on a weekend or on a public holiday, these are usually sent on the next working day.

Transfers via Coconut

For the benefit of those of you have a business account with us, transfers sent from your Coconut account are Faster Payments.

Tags

No items found.

Keep reading

How much should you put away to cover your tax bill?

Finding out that you haven’t got enough money to pay your tax bill is the stuff of nightmares for sole traders and freelancers. Even if you can borrow from others to pay your tax bill, you’re reluctant to, because paying it back can be a real struggle. But there again, going forward, how do you earn enough to cover your living costs and pay the tax you owe? Technology can also really help to ensure that you gain peace of mind from knowing you’ve put enough away to pay your tax bill.

arrow_right

How to reduce your accountancy firm’s costs

Against a backdrop of eye-watering price increases across the board, like everyone else, accountants are experiencing cash-flow pressures. Their small business, landlord and personal clients are also having to deal with significant price hikes, of course, which makes it difficult for accountants to increase their fees and grow their own firm.

arrow_right

How Redundancy Gave John the Push He Needed to Go Freelance

Redundancy leaves many people feeling stuck and unsure what to do next. Instead of waiting for a new opportunity, why not create one? That's what John did.

arrow_right