Faster Payments to a 'CHAPS' account?

Milarky

Can I make a an effective Faster Payment into Britannia B/Socs 'CHAPS' account...

01-05-02 23531800..

..instead of their 'BACs-only' account for such payments i.e...

57-13-27 00000000..

..and NOT pay a fee?

According to the APACS sort code checker '01-05-02' IS enabled for Faster Payments, and therefore ought to work. Thus if I tried to send some money to that sort code/account number and quote a correct account reference (and at the 'right' time of day for a CHAPS payments, 11am-3pm, say) WHY should it be returned? As I understand it, when you use CHAPS you pay whoever you bank with a CHAPS fee and they can then pay this to the chaps at CHAPS. So how could it even be possible to push money into a CHAPS account in the first place using the new 'free' service -i.e. send by FP but quote the CHAPS account + reference - UNLESS the fee is imposed by CHAPS themselves to 'release' any money they do receive - and if they haven't had that fee they won't 'release' the money to the ultimate beneficiary (which is BBS) and instead send it back?

Any knowledge of how CHAPS gets its fee money? Is there a back door they have left open?

Ta

jambosans

To be honest you've lost me... So I will answer as many general questions as possible. Both accounts must be Faster Payments enabled to send and receive them, FP feeds back to the sending bank confirmation that the payment has been accepted, CHAPS do not do this.

I also think you are getting confused, FP, CHAPS, BACS, etc are all methods of moving money between banks. Although in principal FP and CHAPS seem the same, the following is a list of how they differ: they are processed differently; FP is normally restricted to lower amount transfers; CHAPS are normally guaranteed within a set timescale whereas FP may not be available at that point so it has to go BACS. CHAPS are an older form of payment that is tried and tested, thus the fee, whereas FP is newer and still suffering from teething problems.

Just to clarify, because they process differently you can only do FP to FP enabled acounts. CHAPS being older, is accepted pretty much everywhere but you cannot send FP to a CHAPS *enabled* account (there is no such thing as a "CHAPS account") as they are processed differently.

Extant

Milarky wrote: »

Can I make a an effective Faster Payment into Britannia B/Socs 'CHAPS' account...

01-05-02 23531800..

..instead of their 'BACs-only' account for such payments i.e...

57-13-27 00000000..

..and NOT pay a fee?

According to the APACS sort code checker '01-05-02' IS enabled for Faster Payments, and therefore ought to work. Thus if I tried to send some money to that sort code/account number and quote a correct account reference (and at the 'right' time of day for a CHAPS payments, 11am-3pm, say) WHY should it be returned?

Different accounts can be enabled for different payment types - these usually break down in to three main categories C&C (cash and cheque clearing), CHAPS and BACS/FPS.

An account can be set up to receive certain payments only, and this is likely the case for this account. The payment would get through the system and be returned as a non BACS/FPS sort code.

In reverse, you will find that most credit card companies etc. do not accept CHAPS payment to the account details they quote on their bills - they don't want the additional cost of possible having to maintain a CHAPS department, etc.

You can try it; no harm in doing that - if it's sent by FPS, it should bounce back same day if they've set the account to CHAPS only.

As I understand it, when you use CHAPS you pay whoever you bank with a CHAPS fee and they can then pay this to the chaps at CHAPS.

Some money is returned to the CHAPS Company, which is a not-for-profit "member focused" company - i.e. they are owned by the banks that use the service. The money returned helps to pay for the the real time settlement network used, but the entirety of th efee is not passed on.

So how could it even be possible to push money into a CHAPS account in the first place using the new 'free' service -i.e. send by FP but quote the CHAPS account + reference - UNLESS the fee is imposed by CHAPS themselves to 'release' any money they do receive - and if they haven't had that fee they won't 'release' the money to the ultimate beneficiary (which is BBS) and instead send it back?

Any knowledge of how CHAPS gets its fee money? Is there a back door they have left open?

Ta

CHAPS isn't like escrow or anything like that - they don't hold the money for you. It doesn't go from your account to their account and on to your account again - the transfer is direct.

Banks pay their "dues" to CHAPS Co. as a bulk fee, not a "per transaction" fee for each transfer as it goes through.

The reality is that Britannia's accounts are set up in this way because of how they work, not because of CHAPS - they might, for instance, have a team that deals just with the CHAPS coming in to that account, rather than have them look after an account with other payment methods being received.

withnell

Britannia banks with NatWest, so see no reason why this shoudln't work - does the BACS account code not work for FP aswell? In that case you could just use that anyway, because Britannia will credit the account on the day they recieve the funds.

The separate account for CHAPS is just for administrative ease I believe

Milarky

withnell wrote: »

Britannia banks with NatWest, so see no reason why this shoudln't work - does the BACS account code not work for FP aswell?

No it doesn't. Despite Natwest being the most ready for the launch of Faster Payments last May, there seem to be a range of sort codes they maintain which are not FP enabled (and never have been)

For example

Bath B/Soc 623045 00000000
Beverley B/Soc 622890 00000000

Why Natwest even maintains some branches outside the FPS system like this I don't know. It also raises the question of why organisations would choose to receive payment via the slow lane - as well as hacking off their own customers in the process - unless these were 'cheaper' branches to hold accounts with. Given Natwest is 70 odd percent taxpayer owned, I think we should know what the facts are.

Extant

Milarky wrote: »

No it doesn't. Despite Natwest being the most ready for the launch of Faster Payments last May, there seem to be a range of sort codes they maintain which are not FP enabled (and never have been)

For example

Bath B/Soc 623045 00000000
Beverley B/Soc 622890 00000000

Why Natwest even maintains some branches outside the FPS system like this I don't know. It also raises the question of why organisations would choose to receive payment via the slow lane - as well as hacking off their own customers in the process - unless these were 'cheaper' branches to hold accounts with. Given Natwest is 70 odd percent taxpayer owned, I think we should know what the facts are.

They're not branches - they're accounts held with Natwest's head office, most likely. They're not assigned to a branch, they'll be operated entirely for the named building society, almost like an agency bank.

It's their decision in turn whether or not to implement FPS, and it's likely based on cost - the cost of real time settlement is expensive, and will be more so for a small building society than for a large clearing bank.

rb10

BarclaysManager wrote: »

It's their decision in turn whether or not to implement FPS, and it's likely based on cost - the cost of real time settlement is expensive, and will be more so for a small building society than for a large clearing bank.

Why would it be more expensive for the building society for Natwest to change those sort codes over to FP? The BS could still surely process all credits overnight, so transfers to these accounts would be in effect next day.

Extant

rb10 wrote: »

Why would it be more expensive for the building society for Natwest to change those sort codes over to FP? The BS could still surely process all credits overnight, so transfers to these accounts would be in effect next day.

Couple of reasons: FPS participation requires the financial institution to pay dues to CHAPS Co. to help maintain the system, and requires extra hardware to facilitate real time settlement and entry processing - it sounds simple, but FPS means the bank's computers have to process as the entries come, where as BACS is done by batch file and requires relatively simple and cheap computer systems.

On top of that, if these are clearing accounts, there would be the cost of implementing a new FPS system and tying it in to the building society's legacy systems. Then, of course, you have the real question at the end of it: for a building society that offers only mortgages and savings, is the benefit worth the cost?

rb10

BarclaysManager wrote: »

Couple of reasons: FPS participation requires the financial institution to pay dues to CHAPS Co. to help maintain the system, and requires extra hardware to facilitate real time settlement and entry processing - it sounds simple, but FPS means the bank's computers have to process as the entries come, where as BACS is done by batch file and requires relatively simple and cheap computer systems.

So the BS's account will in effect be running on a different platform to Natwest's other accounts then? It's not just a normal account, operating in the same way as all their other accounts then?

Extant

rb10 wrote: »

So the BS's account will in effect be running on a different platform to Natwest's other accounts then? It's not just a normal account, operating in the same way as all their other accounts then?

Many building societies seem to operate one way or the other - they'll either hold regular accounts (with some obvious special arrangements) or hold accounts on a separate sort code/head office sort code (more akin to an agency bank/clearing bank arrangement).

In the case quoted with the two 62- sort codes, they have 00000000 account numbers - so it's a head office sort code with (usually) no specific accounts under that sort code. That sort code exists entirely for one purpose (look at most major credit cards). Although Natwest, as a clearing bank, will provide the maintenance of the facility, they won't do much more than that.