Too big for Faster Payments: rerouted via CHAPS
Trigger: The payment is above the Faster Payments single-payment limit (£1 million) or the bank's own FPS limit.
What operations sees first: A payment the customer expected to be instant cannot use Faster Payments; the bank must choose a different rail by value.
WHERE IS THE MONEY?
The payment is made in full through CHAPS instead of Faster Payments.
DID SETTLEMENT HAPPEN?
Settled immediately and finally, payment-by-payment (RTGS) — not deferred-net as on FPS.
WHO ACTS NEXT?
Bank Alfa (sending bank) Bank Alfa confirms the CHAPS payment to Riya; within-limit amounts would have used the faster, cheaper FPS rail.
PLAY THE EXCEPTION
Trigger: The payment is above the Faster Payments single-payment limit of GBP 1 million (or above Bank Alfa's own FPS limit), so it cannot go through Faster Payments and must take a different rail.
Riya asks Bank Alfa to pay Arjun
Riya (payer) → Bank Alfa (sending bank)
On a Sunday evening Riya opens her banking app and instructs Bank Alfa to send GBP 500.00 to Arjun at Nordbank. Faster Payments runs 24/7, so time of day does not matter. Nothing has moved yet — this is only a request.
Step 1 of 5: Riya asks Bank Alfa to pay Arjun
- 02ProcessingBank Alfa checks the payment in real timeBank Alfa (sending bank)
- 03 · EXCEPTION PATHProcessingBank Alfa sees the amount is too high for FPSBank Alfa (sending bank)
- 05 · EXCEPTION PATHSettlementCHAPS settles the payment in full, one by oneBank of England (settlement) → Nordbank (receiving bank)
- OUTCOME
- Funds
- The payment is made in full through CHAPS instead of Faster Payments; the amount settles gross in central bank money.
- Settlement
- Settled immediately and finally, payment-by-payment (RTGS) — not deferred and not netted as it would have been on FPS.
- Who acts next
- Bank Alfa (sending bank) — Bank Alfa confirms the CHAPS payment to Riya. For amounts within the limit, Faster Payments would have been the faster, cheaper choice.
Full step-by-step text (works without JavaScript)
- 02ProcessingBank Alfa checks the payment in real timeBank Alfa (sending bank)
Bank Alfa validates the account details, confirms Riya has the funds, screens for sanctions, and checks the amount against the FPS single-payment limit and its own limits — all in seconds, because the customer is waiting.
Screening checkpoint: Real-time transaction screening — Near-real-time rails force screening to be fast and automated — there is no overnight batch window to absorb the delay.
- 03 · EXCEPTION PATHProcessingBank Alfa sees the amount is too high for FPSBank Alfa (sending bank)
Rail choice depends on value and urgency. Faster Payments carries single payments up to GBP 1 million; above that, a high-value payment needs a different rail, so Bank Alfa selects CHAPS instead.
- 05 · EXCEPTION PATHSettlementCHAPS settles the payment in full, one by oneBank of England (settlement) → Nordbank (receiving bank)
Unlike Faster Payments, CHAPS settles each payment gross in central bank money at the Bank of England the moment it is processed — no netting and no deferral. Settlement and the customer credit are effectively simultaneous.
- DR Bank Alfa account at the Bank of England — GBP 500.00
- CR Nordbank account at the Bank of England — GBP 500.00
- OUTCOME
- Funds
- The payment is made in full through CHAPS instead of Faster Payments; the amount settles gross in central bank money.
- Settlement
- Settled immediately and finally, payment-by-payment (RTGS) — not deferred and not netted as it would have been on FPS.
- Who acts next
- Bank Alfa (sending bank) — Bank Alfa confirms the CHAPS payment to Riya. For amounts within the limit, Faster Payments would have been the faster, cheaper choice.
THE TIMELINE
- 01Riya (payer)Asks Bank Alfa to send an amount above the FPS single-payment limit.
- 02Bank Alfa (sending bank)Validates the request and finds the amount exceeds the Faster Payments limit, so it cannot use that rail.
- 03Bank AlfaReroutes the payment via CHAPS, the UK's real-time gross settlement rail, where each payment settles individually and finally.
- 04Bank of England (settlement)Settles the CHAPS payment gross in central bank money — no netting, no deferral.
Resolution: Rail choice depends on value and urgency. Faster Payments carries single payments up to £1 million; above that, a high-value payment takes CHAPS, which settles gross and final rather than deferred-net.
Sources for this scenario2
- Scheme-specific rule
Faster Payment System (FPS) ↗ — Pay.UK · single-payment limit
Interbank settlement in FPS is deferred net at the Bank of England — the customer experience is instant, but the banks settle net at defined cycles, not payment-by-payment. Not an RTGS system.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: Single-cycle teaching model; participant-specific handling and exact cut-offs vary.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.