UK payments system outage hits house sales

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House purchases and major UK payments were disrupted on Thursday after an outage at a Bank of England system that lasted for several hours.

Payments via the Chaps service, which is used in the UK for big wholesale transactions as well as retail transactions such as house purchases, resumed during the afternoon, the BoE said.

The issue began earlier in the morning, and originated with Swift, the international payments system, according to two people familiar with the matter.

Swift started investigating the issue on Thursday morning, according to an update it published online. One person familiar with the issue at Swift said the issue had not been caused by a cyber attack. Swift did not immediately comment.

The outage had caused brief chaos in the housing market, which is reliant on the Chaps payment system for completions. Earlier on Thursday estate agent group Foxtons had said two law firms the agency works with had reported delays of at least four hours for funds to be transferred.

The Chaps system was hit by a computer crash in August last year that resulted in thousands of house purchases being delayed. About 4,000 home purchases complete daily in the UK on average, according to RBC.

The BoE initially flagged the issue just before 3pm, blaming a “global payments issue” and saying it was “working closely with a third party supplier, industry and other authorities to resolve the issue as promptly as possible”.

In an updated statement at 4.30pm the BoE said: “We are pleased to confirm that the third party supplier has restored service following their earlier issues, and Chaps payments are settling as normal. We expect that all payments received by the Bank today will be settled by the end of the day.”

Chaps is an automated payments clearing system that the Bank of England has managed since 2017. Its 35 direct participating banks are regulated by the Payments Systems Regulator.

Although Chaps payments only make up about 0.5 per cent of total payment volumes in the UK, their total value accounts for about 92 per cent of sterling payments.

Several thousands of financial institutions make Chaps payments through its direct participants. Last year, a record 51mn payments were processed on the system, which handled £363bn worth of transactions daily in June on average.