CHAPS, the UK’s same day high-value payment system operator, has reduced CHAPS participation fees by 50% for existing and prospective low-volume Direct Participants.
This restructuring of its funding model honours a commitment that CHAPS made in August
CHAPS reduces fees by 50% to entice low-volume participants
2014, making it more cost effective for low-volume participants. The change specifically lowers barriers to access for new and small challenger banks wishing to join.
CHAPS is a ‘not for profit company’, whose funding model is designed to simply recover its annual operating costs. Previously, CHAPS’s funding model was solely based on the volume of payments processed, with each Direct Participant making a 2% minimum contribution, resulting in a minimum cost per Direct Participant of £80,000 per annum in 2014.
CHAPS’ new funding model now comprises of two elements. Firstly, a fixed annual shareholder charge of circa £30,000, which will decrease proportionately as CHAPS continues to expand its shareholder base. The second element is a System usage charge, based upon prior year volumes.
Combined, these cover the running costs of the company and these changes provide more transparent pricing for Direct Participants. As of this year, a low-volume Direct Participant is likely to be charged an annual aggregate cost of approximately £40,000 – a 50% saving over last year.
Phil Kenworthy, CHAPS Managing Director said: “We are proud to have delivered a fairer funding model. It will ensure that the CHAPS scheme is more equitable and simple; delivering benefits to both existing and prospective low-volume participants.
“We are seeing a greater interest from payment service providers in directly joining CHAPS, and we anticipate growth in our direct participation over the next two years as a result of this and other initiatives planned for 2015.”
The post CHAPS reduces fees by 50% to entice low-volume participants appeared first on Payments Cards & Mobile.