SEPA, SWIFT, BACS, and CHAPS: Which Global Payment Network Suits Your Business Needs?
Choosing a payment method doesn’t need to be complicated. Discover the best international transfer options for your business based on its location and your unique circumstances.
Key Takeaways
- There are numerous international payment methods
- Some options cater to users in the UK, EU, or other regions
- This article will help you find an option that meets your needs
With the rise of global payments, you have more payment options to choose from than ever before. However, some options are restricted to certain regions and currencies, meaning that you might prefer one method over the others.
Below, we’ll compare four major global payment methods, allowing you to find one that suits your business perfectly.
SEPA
SEPA — the Single European Payments Area — is a payment integration initiative that allows for euro payments across several countries.
The SEPA area covers 38 countries, including all 27 EU members and several nearby countries. Since Brexit, the UK has participated as a “third country” with stricter access to SEPA and greater compliance requirements.
SEPA features three main transaction types: (1) SEPA Instant Credit Transfers, (2) non-instant SEPA Credit Transfers, and (3) SEPA Direct Debit.
SEPA transfers generally rely on IBAN numbers for routing.
Pros
- Regional focus: SEPA provides access to most of Europe.
- Fast transactions: SEPA Instant Credit Transfers take just seconds, and standard SEPA Credit Transfers usually take one business day.
- Low fees: SEPA transfers typically have the same fees as regular bank transfers. Transactions usually cost under €5 and are sometimes free.
- Around-the-clock instant transfers: SEPA Instant Credit Transfers are available 24/7 every day of the year.
- Virtually unlimited standard transfers: Standard SEPA Credit Transfers are capable of transferring just under €1 billion.
Cons
- Limited currencies: Funds are generally sent as or converted to euros.
- Instant transfer limits: SEPA Instant Credit Transfers can only be used to transfer up to €100,000 per transaction, and individual banks and payment services may impose a lower limit.
- Cutoff times for non-instant transfers: Your bank or payment service may set a cutoff time for some SEPA transfers, usually a few hours before closing time (to see Payset’s cut-off times, click here). Later requests may be processed the next business day.
SWIFT
SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, is the world’s primary financial transaction messaging network.
Technically, SWIFT does not handle funds. It allows financial institutions to provide instructions to one other. But as a business or consumer, you’ll generally use SWIFT to send and receive international wire transfers.
SWIFT transactions rely on SWIFT/BIC codes for routing.
Pros
- Global access: More than 11,000 financial institutions in 200 countries make use of SWIFT, allowing for transfers almost anywhere in the world.
- Extensive currency support: Several currencies, including the US Dollar (USD), euro (EUR), and British Pound (GBP) can be sent via SWIFT.
- No amount limits: There is theoretically no limit to the amount of money that you can send via SWIFT, but your bank or payment service provider may set its own transfer rules and limits.
Cons
- Speed: SWIFT transfers usually take 1-4 business days, in part due to reliance on intermediary banks and anti-fraud/money laundering checks.
- High fees: SWIFT transfers are expensive. It often costs €10-50 to send a wire and €5-20 to receive a wire, and fees may fall outside this range.
- Extra fees: You might pay even more if intermediary banks are involved.
- Cutoff times: There is no single SWIFT cutoff time. However, banks and payment services set their own business hours and cutoff times. Later requests may be processed on the next business day.
BACS
BACS is a UK-based bank transfer network. Since 2018, it has operated as a subsidiary of Pay.UK, a non-profit service company.
BACS handles two kinds of transfers: direct debits (such as scheduled bill payments) and direct credits (such as payroll deposits and supplier payments).
It uses 8-digit UK bank account numbers and 6-digit sort codes for routing.
Pros
- Low cost: BACS transfers generally cost 5 to 50 pence. That’s cheaper than other UK payment options, such as CHAPS and Faster Payments.
- Ease of use: BACS transfers are simple as long as you access the service indirectly through a third party. Larger organizations might want to make an effort to obtain direct access for better fees and faster speeds.
- Scheduling: BACS offers transaction scheduling and recurring payments.
Cons
- UK only: BACS payments are only for British pound sterling (GBP) payments within the United Kingdom.
- Slow speed: BACS transfers usually take three business days, making it one of the slowest UK options. By contrast, CHAPS payments complete on the same day, and Faster Payments are nearly instant.
- Cutoff times: BACS transfers can be initiated before cutoff times on business days. Later requests may be processed the next business day.
CHAPS
CHAPS, or the Clearing House Automated Payment System, is operated by the Bank of England. It’s intended for high-value transactions in the UK, but it can also be used for lower value payments, especially time-critical payments.
Though primarily for business use, it can also be used for some personal payments, such as car and house payments.
CHAPS transactions use UK bank account numbers and sort codes for routing.
Pros
- Same-day transfers: CHAPS payments typically arrive on the same day if they are sent before the deadline and on business days.
- Extensive UK participation: Over 35 UK banks are direct CHAPS participants, while 5,000 are indirect participants.
- No minimums or maximums: CHAPS was once limited to transactions above £10,000. Now, it can be used to transmit any amount where the fees are feasible and in line with banks’ individual limits.
Cons
- High fees: CHAPS fees often range from £25-£35.
- UK only: Like BACS and Faster Payments, CHAPS is limited to the UK.
- Cutoff times: CHAPS payments can be initiated before cutoff times on business days. Later requests may be processed the next business day.
Payset: Access to SWIFT, SEPA, BACS, CHAPS, and More
With a Payset account, you’ll be able to make payments on networks including SWIFT, SEPA, BACS, CHAPS, the Faster Payments Service, and more.
With our multi-currency IBAN accounts and real-time foreign exchange, you can exchange up to 34 currencies and make payments to 180 countries.
Combined with fast transfer speeds, competitive rates, and top-of-the-line security, we aim to provide the best experience possible.
Frequently asked questions
What is a multi-currency account/virtual IBAN?
A Payset multi-currency account allows you to receive money in 34 different currencies and send money in up to 38 currencies, all within the same account.
You can deposit and withdraw funds, convert currencies at competitive exchange rates, and hold your chosen currencies to capitalize on market movements.
A Payset multi-currency account allows startups and business owners to receive payments from clients virtually anywhere in the world and pay suppliers, staff, and contractors quickly and affordably in their chosen currency.
- Funds can be deposited and withdrawn from the account for a small fee.
- Account holders can send and receive money with other Payset users for free.
- Depending on your region, you can use various payment networks from your Payset account, including SWIFT, SEPA, ACH, Fedwire, Faster Payments, BACS, and CHAPS.
- Once you register an account, you will be provided with a Virtual IBAN (International Bank Account Number), which makes all of these transfers easy.
- We provide you with local payments and collections. For example, transactions in USD, EUR, CAD, and GBP are processed through the local payment networks, which is far cheaper and takes minutes as opposed to days
Are there limits on the amount of money I can send and receive?
No, there are no transaction limits on Payset multi-currency accounts.
However, higher-volume transactions may require additional anti-fraud verification. If you plan to make a large transaction, contact us in advance to avoid verification delays.
How is Payset regulated?
Payset is regulated as an authorized Electronic Money Institution by the UK Financial Conduct Authority. Our activities are also regulated by the Payment Services Regulation 2017 and the Electronic Money Regulation 2011 (SI 2011/99).
How do I add money to my account?
How do I send money from my account?
Once you have opened your verified IBAN account and added money to a balance, transferring funds is simple.
Simply log in into your account and add a beneficiary, then simply “make a transfer” in your preferred currency to that beneficiary.
Types of Multi-Currency Accounts
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