A Quick Guide to Bank Transfers


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A quick guide to bank transfer mechanisms in the UK, including Bacs, CHAPS and Faster Payments

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A Quick Guide to Bank Transfers

  1. 1. © Stuart Mitchell
  2. 2.  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
  3. 3.  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
  4. 4.  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
  5. 5.  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
  6. 6.  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
  7. 7.  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 paymentsmust be processed by the end of the next business day
  8. 8.  What is Bacs? What is CHAPS? What are Faster Payments? Bacs website CHAPS website UK Payments Administration (formerly APACS)