Staff Working Paper No. 1,180 examined UK payment flow data following the increase of the Faster Payments Service per-transaction limit to GBP 1 million. The authors isolated the causal effect using difference-in-differences methodology, comparing the affected GBP 250,000 to GBP 1 million band against adjacent transaction size bands that served as controls.
The 10.7 to 13.7 percent volume decline in the contested band represents a measurable shift in where institutions route large-value payments. This has direct implications for RTGS liquidity management and the cost recovery models that fund large-value settlement infrastructure.
The Bank of England is separately extending CHAPS settlement hours to 1:30 AM from June 2027. That change expands the time window in which Faster Payments and CHAPS directly compete for time-sensitive payments in the GBP 250,000 to GBP 1 million range.