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What is the difference between a BACS and a CHAPS payment?

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'BACS' and 'CHAPS' are payment terms used by the UK banking system. A debit or credit entry is processed to make direct transfers to / from third party accounts.

BACS is an easy way of transferring money electronically from one financial institution to another. A BACS transaction takes between three and five working days to complete and the BACS system is used by most Umbrella Companies. If an Umbrella Company pays you by BACS on a Friday, the money will usually take three working days to reach your bank account (i.e the following Tuesday).

CHAPS is short for Clearing House Automated Payment System. This is a same day transfer of money from one financial institution to another. There is usually a charge for the CHAPS service so it is likely that an Umbrella Company or ASP will pass this charge onto you.

More on BACS and CHAPS
wikipedia definition of BACS
wikipedia definition of CHAPS

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