System outages across UK and Europe hit home sales and payments

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A disruption to the Swift international cross-border payments system that lasted for hours on Thursday halted home buying and other large transactions in the UK and Europe.

The Bank of England said some high-value and urgent payments had been delayed in the UK due to global payments issues affecting the chaps service, which is used for large wholesale transactions and retail transactions such as home purchases.

The BoE later said payments via Chaps had resumed. The European Central Bank also said its payment system had been affected by the Swift outage.

The outage has caused temporary disruption to the UK housing market, which relies on chaff services to keep construction completed.

Estate agent Foxtons said two law firms it works with reported delays of at least four hours in transferring funds.

Swift, which facilitates cross-border payments between banks, said in a statement on Thursday that it had experienced an operational incident that delayed the processing of its services, adding that it was not caused by a cyberattack.

Swift said it takes all operational incidents very seriously, is conducting a full investigation, and apologizes for any disruption caused.

The BoE first identified the Chaps service issue on Thursday afternoon, saying it was working closely with third-party providers, industry and other authorities to resolve the issue as quickly as possible.

The BoE later said: “We are pleased to confirm that the third-party provider has restored service following the previous issue and Chaps payments are now being processed normally.”

All payments received by the bank today are expected to be settled within today.

The ECB said it had delayed the shutdown of its payments system by an hour due to issues affecting Swift.

The problem has had less of a knock-on effect on the ECB than on the BoE because fewer euro zone banks rely on Swift compared to British institutions, according to a person briefed on the issue. The problem has repercussions across the world, he said.

The Chaps service is an automated payment clearing system that has been managed by the BoE since 2017. The 35 direct participating banks are supervised by the Payment Systems Regulator.

Payments via Chaps account for just 0.5% of total UK transactions, but they account for around 92% of total value of pound sterling payments.

Thousands of financial institutions accept Chaps payments. Last year, the service processed a record 51 million payments, and in June, it processed an average of $363 billion worth of transactions per day.

Chaps suffered a computer crash last August, which delayed thousands of home purchases.

Additional reporting by Josephine Cumbo in London, Laura Dubois in Brussels and Joshua Franklin in New York

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