Bank of England economists James Duffy and James Sanders published Staff Working Paper No. 1,180 on April 24, 2026. The paper uses the February 2022 decision by Faster Payments to raise its single-transaction limit from £250,000 to £1 million as a natural experiment. CHAPS volume in the £250,000 to £1 million band averaged 10.7% to 13.7% lower than if the limit had not changed.
Substitution was far greater for customer credit transfers and lower-value payments within the affected band. The cost differential between the two rails is substantial: Faster Payments charges banks a fraction of a penny per transaction versus approximately 43 pence for CHAPS.
Sustained migration at this rate could erode CHAPS revenue and reshape liquidity-management incentives across the UK financial sector.