Bank of England to Open UK Payment Rails at 1:30 AM in Push for 24/7 Settlement

Bank of England to Open UK Payment Rails at 1:30 AM in Push for 24/7 Settlement

The Bank of England will shift the start of settlement for the UK's high-value payment system to 1:30 AM starting September 2027, a 4.5-hour extension designed to align British financial plumbing with global markets and strengthen liquidity management for corporate treasurers.

The change affects Chaps, the UK's real-time gross settlement system that processes roughly £400 billion in payments daily—everything from same-day house purchases to interbank transfers and corporate treasury operations. For CFOs managing international cash positions, the early morning window means payments can settle before New York opens, potentially reducing overnight funding costs and foreign exchange settlement risk.

Participation in the extended hours will be optional for the roughly 30 direct participants in Chaps, which include major UK banks and building societies. The Bank of England announced the decision following a consultation period, though it did not disclose how many institutions plan to utilize the early morning settlement window.

The central bank framed the extension as part of a broader modernization effort, citing three objectives: enabling earlier settlement for time-sensitive payments, strengthening operational resilience by spreading settlement activity across more hours, and better synchronizing UK payment infrastructure with international markets. The latter point matters for multinational corporations that increasingly expect treasury operations to function across time zones without waiting for regional banking hours.

Notably, the Bank of England is not extending Chaps settlement into the evening—at least not yet. The central bank said it is not currently planning to expand the evening contingency window, which suggests the early morning extension is viewed as the higher priority for market participants. Work continues on bank holiday settlement and what the Bank describes as "the wider roadmap towards near 24x7 settlement," with a consultation paper expected in spring 2026.

The September 2027 implementation date gives banks more than a year to prepare systems and staffing. For institutions that opt in, the extended hours will require operational adjustments—treasury teams accustomed to a 6:00 AM start will need to decide whether the competitive advantage of earlier settlement justifies the infrastructure investment and potential overnight staffing.

The move reflects a broader trend in payment infrastructure. Central banks globally are under pressure to modernize settlement systems as corporate treasury operations become more real-time and cross-border. The question for UK finance leaders is whether their banking partners will actually use the new window—and whether competitors who do will gain a meaningful edge in cash management and FX settlement timing.