What does CHAPS stand for?

CHAPS stands for Clearing House Automated Payment System. This system is a UK-based electronic payment network that enables the same-day settlement of high-value payments in British pounds sterling. Utilizing the clearing house mechanism, CHAPS ensures that funds are transferred quickly and securely between banks, making it a vital component of the financial infrastructure for major transactions.

The term emphasizes "Clearing House," which refers to an institution or network that facilitates the settlement of financial transactions, particularly in regard to large payments that require a high degree of reliability and speed. This system plays a critical role in making the settlement of interbank payments efficient, which is essential for businesses that need immediate access to funds to keep their operations running smoothly.