More on UK Payment Systems
The UK's interbank payment system for high-value wholesale payments is called the Clearing House Automated Payment System (CHAPS). CHAPS is a real-time gross settlement system (RTGS), which means that payments are processed through CHAPS individually and continuously during the day in real time. Previously, payments were processed as a single net transaction at the end of the day, which exposed the settlement banks to very substantial losses if one of the other settlement banks were to fail.
There are two components to CHAPS: one operating in sterling, the other operating in euro. To enable large real-time cross-border payments to occur, CHAPS Euro is linked to the pan-EU RTGS system, called TARGET. (Trans-European Automated Real-Time Gross Express Transfer System) TARGET links euro RTGS systems in all the EU central banks with each other and with the European Central Bank.
CREST, the UK's securities settlement system, and LCH Clearnet Ltd, the central counterparty serving many of London's financial markets, both have 'embedded' payment mechanisms. Real-time settlement between CREST settlement members was introduced in November 2001.
BACS Payment Schemes Limited (BPSL) is responsible for the clearing and settlement arrangements for Direct Debits, Direct Credits and standing orders. BACS is the UK's largest 'retail' payment system in terms of the total value of transactions settled. The Cheque and Credit Clearing Company is responsible for clearing and settlement arrangements for paper items such as cheques and paper credit vouchers.
There are also a range of card payment schemes in the UK. The main debit and credit card systems are operated by Visa Europe, MasterCard Europe and S2 Card Services (which manages the Maestro and Solo debit card schemes). Many ATMs are connected via the LINK system, a reciprocal agreement allowing customers to access their accounts from any of the participating institutions.
The Association for Payment Clearing Services (APACS) is the UK trade association of banks and building societies involved in the payments system.
Key Resources
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Payment Systems Oversight Report Download PDF (1mb) |
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Bank of England Settlement Accounts: A Policy Document In its paper, Oversight of Payment Systems, published in November 2000, the Bank said that it would set out its policy on the provision of settlement accounts for payment system members. This document meets that commitment. Download PDF (157k) |
