Investigation launched into delays in house purchase payments

International banking officials are currently investigating the cause of a global “payment problem” that caused delays of several hours in the transfer of time-critical, high-value funds, including home purchases.

Swift, the global financial artery that enables smooth and fast money transfers across borders, said it was taking the incident “extremely seriously” and apologised for the disruption caused.

The Bank of England had previously warned that payments made through the CHAPS system, which is used by both traditional UK branch banks and international lenders, could be affected by a problem in the wider global payments network.

The bank said the problem with Swift was resolved after a few hours.

Swift said the issue, which led to payment delays for some customers, was caused by “an operational incident.”

The problem has no cyber-related connection, they said.

“We are engaging with our customers to help them mitigate the impact on their operations and, in turn, on their own customers’ transactions,” it said in a statement.

The problem did not affect traditional debit and credit card payments, ATMs or bank transfers.

The Bank of England said all outstanding payments scheduled to be transferred would be settled by the end of the day and advised anyone concerned about a CHAPS payment to contact their bank.

“We are pleased to confirm that the third-party provider has restored service following previous issues and CHAPS payments are being processed as normal,” the bank said.

Banks and lenders use the CHAPS system to transfer money to each other. In total, 200,000 payments worth £363 billion are processed through the system every day in the UK.

Several thousand financial institutions in the UK could be directly or indirectly affected.

Private individuals use it for high-value transactions such as home completions and car purchases. On average, around 4,000 real estate transactions take place every day.

Andrew Montlake of mortgage broker Coreco said the situation early Thursday could “become a nightmare scenario for homebuyers on completion day, potentially leaving them stranded with their packed moving trucks and not knowing where to go.”

The problem arose from part of the Swift system, which stands for Society for Worldwide Interbank Financial Telecommunication.

Founded in 1973, Swift is based in Belgium and connects 11,000 banks and institutions in over 200 countries.

It is not a bank per se, but a cooperative that operates an instant messaging system that informs users when payments are sent and received.

Over 40 million messages are sent every day, while trillions of dollars change hands between companies and governments.