CHAPS- Is £20+ a fair charge?

[bigkacker]

Yes £20 is fair for a service. There is quite a lot of administration goes into a CHAPS payment at both ends. This is a service for which the banks are entitled to charge for and make a profit, a healthy one at that.

 

Some accounts will offer this facility for free if you shop arround.

[lsba02853]

What admin?

If it's a manual payment, a drone enters it into a computer and it's automatically sent and reconcilled the other side.

 

The cost of a chaps payment to a bank is less than £1.

[JonCris]

Solicitors only pay £5 for the 'service'

[ab123uk]

£20 is fair for the work involved, often people ring up customer services to see why a chaps hasn't arrived (when it was sent 5 minutes before), Cust Services then speak to Payment Clearing/Processing, so we have now had the branch cashier, the customer service assistant, and the payment clearing helpline, deal with the same query within 10 minutes.

 

The fraud & Anti Money Laundering checks that have to be done on these transactions, that are their for larger amounts, are not a case of press enter and let it go. So the AML staff have a look, then payment processing allow the transaction, and pass that to the clerk responsible for downloads.

 

Downloads for all the major banks take place at intervals throughout the day, often inaccurate data is recieved, wrong a/c no's etc, thus taking more time, and a member of staff to correct this and find the account, or return the payment, where all the above would be repeated again!

 

Hope this makes sense, and explains why the fee's are higher than some would like.

 

SOME Solicitors pay £5 as this is an agreement between them and their business banking provider, this is usually because they are normally House Purchases, and send a lot of business through, for HBoS, they also input the data.

 

Chaps is the UK's Clearing House Automated Payment System,

Foreign Transactions are Telegraphic Transfers, these require even more work than above- mainly due to the global money laundering problems.

 

(I Used to work for HBoS Payment & International Services)

[ab123uk]

The most telling paragraph from the above article:

"

The true cost of arranging a same-day CHAPS transfer from one bank to another is estimated to be around £3, thanks to large-user discounts of around 90%. (Transfers between your accounts at the same bank normally don't attract this fee.) Indeed, if the bank sending the payment is itself a member of the CHAPS Clearing Company Limited, then the effective marginal cost is close to zero."

 

That might be the cost to Clearing House Automated Payment Systems, howeve the 'AUTOMATED' is that it automatically goes through them, not through the banks!

[noodledoodle]

When working for a payroll company in a previous life we used to send upwards of 100 chaps payments a day. Our bank Drummonds @ RBS charged us £2.50 per CHAPS transaction. Someone somewhere is definitely making money on this!

[Guest NATTIE]

ab123uk, a good post and does explain why some payments are delayed, ie, additional security checks not being completed by a cut off point.

[davethorp]

Only time I've used CHAPS has been to withdraw money from my egg savings account and thats only been at times where I didn't have a reliable (read that not overdrawn) bank account for deposits to go into so I've used my savings and account and withdrawn it as soon as a current account was set up. I paid £25 for two transfers. One was £830 and other was £130 but both times I needed the money in an account I could actually get at whereas I don't have a card for my egg account

 

For same day processing its worth the charge and strikes me as being an extra service rather than a penalty charge. After all you have a choice. If you don't want to be charged make the transfer with BACS. Takes longer but its free. If you must have the money there and then use CHAPS.

[Guest NATTIE]

I agree to a point but you cannot transfer £100,000 online, most banks have a limit of £10000 where it is going externally from the bank. As joncris pointed out solicitors get charged £5. Some things will change when faster payments come in later this year where transfers online will be a matter of hours rather than 3 days with BACS at the moment

[Andy999]

The thing with solicitors is that, because their client accounts hold lots and lots of money, they're valuable clients to the banks and therefore can negotiate a better tariff. Probably, my local taxi company pay less when one of their taxis needs a new tyre than I would, because they'll get a discount because of the other work they give to the garage.

 

I have read a bit about the replacement for BACS. One thing I haven't seen is what it will cost. Given that BACS is free (to personal customers), people are expecting this new system to be free. I doubt this will be the case though, and I think we can expect to start paying for BACS payments, say 50p or thereabouts.

 

You can't have your cake and eat it, as the saying goes.

[Guest NATTIE]

faster payments will cost nothing but i cannot comment on much more because it is not until November that it will happen.

[ab123uk]

Thats understandable Nattie, its going to be interesting to see how the new payments sytem works, and how the banks implement this!

[JonCris]

Probably by charging £25 to £35 is my guess

[Guest NATTIE]

Jon, here is a little bit of news, the faster payments method is going to be........FREE. It also affects standing order payments as well which is FREE. However I still believe the cap is on payments of £10,000.00 or below.

[Esio Trot]

The fraud & Anti Money Laundering checks that have to be done on these transactions, that are their for larger amounts, are not a case of press enter and let it go. So the AML staff have a look, then payment processing allow the transaction, and pass that to the clerk responsible for downloads.

 

Like most things in this country, the EC brings in ML rules, and the administrators add in the most detailed procedures they can (like the hoops you have to go through to open an account).

 

When you think about it, most drug, sex racket, and other criminal money is CASH. These people want to get it into the banking system - that's where the money laundering should be concentrated. In my business we have had to register and get approved under money laundering regulations - yet we give out money, we don't take it in.

[lsba02853]

Jon, here is a little bit of news, the faster payments method is going to be........FREE. It also affects standing order payments as well which is FREE. However I still believe the cap is on payments of £10,000.00 or below.

 

Prices haven't yet been set, but the cap is going to be higher than £10k.

[Guest NATTIE]

interesting info, what prices pray tell?

[younganfree]

To be really honest with you, I don't care what anyone says. Why should I have to pay to get access to MY OWN MONEY!? Bottom line!

[Guest NATTIE]

I think you need to re read the thread this one is about transferring from say you to me not accessing the money just moving it to someone else

[lsba02853]

To be really honest with you, I don't care what anyone says. Why should I have to pay to get access to MY OWN MONEY!? Bottom line!

 

 

This thread isn't about access to your money, it's about a service that the banks provide allowing you to move that money in a secure manner from on account to another.

 

Chaps is guaranteed and irrevocable once it's been released. The banks pay a fee to be a member of Chaps and they charge for this service.

 

I don't agree with the high fee but they do have a right to charge for it.

[stevesj]

given that it is a negligible / nil cost to access and transfer money say from one bank account to another (at the same bank) via the secure internet, isn't the faster payment system based on this? - you could be paying a vastly reduced price for a transfer in hours rather than days, and I've heard that the DWP will be soon intiating a same day service for benefits, at no charge to the claimant (other than the tax payer:rolleyes: ), it's being trialled in some small part of the UK as we type.........but......it will only be for emergency payments:???:

[lsba02853]

You'd be surprised. To be a full member of CHAPS, it costs the banks somewhere in the region of £100k. Plus the up keep of secured servers, backups and all that. However regardless of what they pay out it's very profitable for them. Especially when you consider all the estate agents paying money away each day for completions.

 

Transfering money from one account to another in the same bank is no cost at all, it's a simple book entry.

 

Read here for more information on faster payments:

 

APACS - New Technology and Development - Faster Payments in the UK

or if you're really interested:

 

gtnews: login

I believe the 2nd link might require sign up.

[ab123uk]

Im sorry, I think people are getting confused. If you want your money- go and withdraw it.

If you want a sameday transfer, to another bank- pay for it- the staff that do It need to be paid, and if you read this thread in full, you'll understand it.

 

On my more specialist issue;

If you want a sameday transfer from BoS to BoS Business Banking, Halifax to BoS (old a/c's), BoS Business Banking to Halifax- yes, they are all part of HBoS, but these accounts are operated on different platforms, so no, its not a book entry- the costs are the same to the bank as they would be for an external payment.

 

Just in Case anyone wonders about the above-

Halifax & Bank of Scotland Accounts:

 

Halifax/BoS Retail A/c- a normal account, like me & you have, has a sort code, a/c no. and D/ or 2/ roll number.

 

BoS A/c (non migrated) very rare now, if any at all, has a sort code and account number.

 

HX/BoS Business Banking- has sort code, a/c no.

 

Sorry if Im stressing, but If people read the full thread, people have an Idea.

 

but to Summarise:

 

Bank, pays membership and sets up CHAPS.(FEES)

Customer, goes to branch or rings bank to arrange CHAPS (STAFF WAGES)

Processing Team process payment (STAFF WAGES)

Anti Money Laundering Checks (STAFF WAGES)

Payment Sent (FEES TO CHAPS -clearing house automated payment systems ltd)

 

plus the cock ups with wrong details that people say are DEFINITELY RIGHT, ooh, thats wrong!

 

I had had such enough of working for a bank, but believe me, this profit they make of CHAPS isnt 100%, yes they do make, but come on, use common sense and look at the bigger picture!

[Scooby359]

A lil advice for anyone that can use it.. I work for Halifax, and had requests to do a Chaps transfer and understandably had a few customers shocked at the charge.

 

So the way round this I've found, if it's for less than £5000, is to do them a bill payment - using a current account, a bill payment can be set up for the ATM Machines, aloowing a transfer of up to £5000 which is processed like a standing order, but done on request.

 

Not perfect, and takes a couple of days to go through, but it often works well for people transferring money who want to avoid the charge.

[Guest NATTIE]

scooby make sure you Private Message Dave or BankFodder, just one of the site rules on here.