A CHAPS payment (UK sterling RTGS)
A high-value sterling payment settles one-for-one across the banks' accounts at the Bank of England, in real time and with immediate finality — each payment settles on its own in central-bank money, with no netting and no waiting for a cycle.
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Bank Alfa submits the CHAPS payment
Bank Alfa (sending bank) → CHAPS · pacs.008
Bank Alfa must pay a high-value sterling obligation — the completion monies on a property purchase — to Nordbank, so it sends an interbank payment (a pacs.008) into CHAPS. Since the ISO 20022 migration on 19 June 2023 the message carries richer structured data, including the Purpose Code and Legal Entity Identifier (LEI). Nothing has moved yet — it is an instruction.
Step 1 of 5: Bank Alfa submits the CHAPS payment
- 02ProcessingCHAPS checks Bank Alfa's available liquidityCHAPS → Bank of England (RTGS)
- 03SettlementThe Bank of England settles the payment in central-bank moneyBank Alfa (sending bank) → Nordbank (receiving bank)
- 05PostingNordbank books the incoming fundsNordbank (receiving bank)
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- 02ProcessingCHAPS checks Bank Alfa's available liquidityCHAPS → Bank of England (RTGS)
Before it settles anything, CHAPS checks whether Bank Alfa's settlement account in the Bank of England's RTGS infrastructure holds enough available liquidity to cover the full GBP 850,000.00 amount.
- 03SettlementThe Bank of England settles the payment in central-bank moneyBank Alfa (sending bank) → Nordbank (receiving bank)
With liquidity confirmed, the Bank of England debits Bank Alfa's settlement account and credits Nordbank's, one payment at a time. CHAPS settles each payment individually in central-bank money, without any prior netting, and the transfer is final the instant it settles.
- DR Bank Alfa's settlement account at the Bank of England — GBP 850,000.00
- CR Nordbank's settlement account at the Bank of England — GBP 850,000.00
- 05PostingNordbank books the incoming fundsNordbank (receiving bank)
Because the interbank leg already settled with immediate finality, Nordbank records the credit on its own ledger without waiting for anything else. The property completion is paid, end to end.
- CR Incoming settlement account at Nordbank — GBP 850,000.00
What this simplifies: One sterling payment settling gross. Real CHAPS operation depends on intraday liquidity management, the Bank of England's intraday liquidity facility, central-queue optimisation, and settlement windows across the whole business day.
Sources for this flow2
- Official requirement
CHAPS ↗ — Bank of England
The Bank of England has operated CHAPS directly since November 2017; participant-facing reference documents are published separately.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: Fictional banks and a single high-value payment; real CHAPS operation involves many direct participants, the Bank of England's RTGS account and collateral structures, intraday liquidity facilities, and operating-hour cut-offs not shown here.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.