The Bank of England published a staff working paper analysing how the February 2022 increase in the Faster Payments Service (FPS) transaction limit from £250,000 to £1 million affected usage of CHAPS, the UK’s high-value real-time gross settlement (RTGS) payment scheme. The paper finds strong evidence of substitution away from CHAPS to FPS for payments in the newly eligible value range. Across several empirical approaches using CHAPS data, estimated CHAPS volumes between £250,000 and £1 million were on average 10.7%–13.7% lower than they would have been without the FPS limit increase, implying around 1.2–1.6 million fewer CHAPS payments over February 2022 to September 2024, with a central Bayesian estimate of 1.64 million (13.7%). Substitution was materially higher for customer credit transfers (16% lower than the counterfactual) than for financial institution transfers (7.1% lower), and was stronger at the lower end of the value band (15% for £250,000–£500,000, 12% for £500,000–£750,000, and 9.9% for £750,000–£1 million). The paper also notes that while most CHAPS payments are below £1 million, they represent a small share of CHAPS value, so the liquidity impact is assessed as negligible. The working paper is published to elicit comments and debate and does not represent Bank of England policy.
Bank of England 2026-04-24
Bank of England working paper links Faster Payments £1 million limit to a 10.7%–13.7% fall in CHAPS volumes
The Bank of England published a staff working paper analysing the impact of the February 2022 increase in the Faster Payments Service transaction limit from GBP 250,000 to GBP 1 million on CHAPS usage. It finds strong evidence of substitution, with CHAPS volumes between GBP 250,000 and GBP 1 million estimated to be 10.7%–13.7% lower than without the change, implying around 1.2–1.6 million fewer CHAPS payments and a negligible liquidity impact given the low value share of such payments. The paper is intended to elicit comments and does not represent Bank of England policy.