CHAPS is a type of payment meant for sending large payments > £1m. It's expensive for you to send, slow and doesn't work on weekends.
We always recommend sending payments using the faster payments scheme where possible as it's instant, much cheaper, and 24/7.
This is generally the default option for most business banks.
How do I know if I'm sending a CHAPS payment?
The big banks aren't very transparent about this but most banks default to sending through the faster payments which is great news. Below we will give you the key things to look out for:
Some banks like HSBC.net show CHAPS as same-day payment, make sure you choose the option called faster payment.
If you're still unsure you can check your bank charges, as CHAPs payments normally cost around £25 to send
Why should I use faster payments instead of chaps?
The main reason is the cost. For you to send a chaps payments the bank charges your business around £25, then on top of this we get charged to receive this charging you another £25. For faster payments, we don't charge anything to receive.
CHAPS doesn't work on weekends and your bank's cut-off time on Friday could mean that it only gets sent on Monday because of this. Faster payments is nearly always nearly and 24/7 (even on bank holidays)