It’s fair to say the electronic and digital technology has revolutionised the way we do banking. Money can now be sent around the world at the touch of a button and with technology rapidly evolving all the time, it makes payment transfers a lot easier.

However, while sending money electronically may seem like a simple and straightforward process, there is a lot going that we don’t see. Of course, understanding that isn’t really all that important to execute a bank transfer, but the main question many of us might ask is ‘how long will it take?’  

The answer to that one may be filed under the ‘how long’s a piece of string?’ category as different forms of payment transfer can take different lengths of time to complete.

For a start, it’s worth look at some of the different types of payments transfer out there and which we may use, even unknowingly, on a regular basis.

BACS

Bacs stands for Bankers Automated Clearing Services and is a form of payment transfer which happens between banks. All of the major UK banks are part of the Bacs Payments Scheme, which processes and manages payment transfers.

There are two main forms of Bacs payments. The one most people are familiar with is Direct Debit. This is when you give a company – or more accurately a bank account held by a company – permission to take funds from your account on a regular basis. This can be to pay for bills such as utilities, mobile phone or broadband subscriptions.

You instruct your bank to make authorise another bank account to take the money when you fill out a Direct Debit Mandate. Direct Debit Bacs payments usually take up to three days to process. This is the time from which the funds are applied for and the time they actually leave your bank account.

The other form of Bacs payment is known as Direct Credit. This is when money is paid into a bank account. Most people in the UK receive their salary this way. It is also widely used to pay pensions and benefits. A Bacs Direct Credit payment usually takes around three days to show up in your account after the initial funds have been transferred.

Chaps

Chaps stands for Clearing House Automated Payment System and provides a faster option than Bacs payments. Chaps payments can be made and received on the same day and are normally reserved for large sums of money.

Many businesses use this method to transfer money quickly but it is also an effective option for individuals who need to make a payment by a certain deadline. You might use it, for example, to put down a deposit for a new house.

Faster Payments

As the name suggests, Faster Payments are just that. They are also a same-day payment option like Chaps. However, funds will only be transferred on the same day using Chaps if payment is made by a certain time. Faster payments can be almost instantaneous. They can be used to send money to another bank account at any time of day or night.

Thanks to the Faster Payments System (FPS), amounts of up to £250,000 can be paid. Most Faster Payments take only a few minutes, but some can take up to two hours to go through.

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