BANKS will come under pressure to link themselves up to the Bank of England’s main payments system, the Bank’s chief cashier Chris Salmon announced yesterday.
He said that the status quo, whereby UK banks route most payments through 18 large banks that are hooked up to the real-time “CHAPS” system, concentrates systemic risk.
Salmon said that means more than half of the CHAPS payments executed each day are effectively “unsecured lending” by payments banks to smaller banks “until accounts are squared at the end of the day”.
In response, the Bank will now “encourage” banks to link themselves to CHAPS, with “more formal action” to follow if they refuse.
Paul Styles of payments technology provider ACI Worldwide said doing so “no longer implies such significant cost” as it did in the past and should be relatively simple.