Stress-free spending: why payment choice matters for disabled people

Lily Smith

Research on payment preferences in the UK has rarely explored how preferences and experiences vary by disability type, often treating disabled people as a homogenous group. Recent Bank of England research addresses this gap by focusing on the payment preferences and behaviours of different disability types and shows that, for disabled people, payment choice is crucial for reducing stress, building confidence, and supporting independence.

Continue reading →

Balancing complexity and performance in forecasting models: insights from CHAPS volume predictions

Tom Davies

CHAPS is a critical element of the UK’s payments landscape, handling 92% of UK payment values despite comprising 0.5% of volumes. CHAPS is used for high-value and time-critical payments, including money market and foreign exchange transactions, supplier payments, and house purchases. We forecast CHAPS volumes to help CHAPS participants in making staffing decisions and support our long-term planning including system capacity and tariff setting. While advanced forecasting methods can capture subtle, non-linear patterns, a tension arises: should we use complex models for the most accurate prediction, or use simpler, transparent approaches that stakeholders can quickly grasp? In practice, forecasting isn’t as straightforward as picking whichever model maximises performance; it is the combination of computation and domain expertise that shapes success.

Continue reading →

With the arrival of stablecoins, is it time to pay farewell to traditional payment rails?

Aly Soliman

Stablecoins have emerged as an innovative form of money in the financial landscape. While they represent a small fraction of the global financial system, stablecoins have grown by US$30 billion in the last few months (as reported on DefiLlama). The potential effect of stablecoins on the payment industry could be substantial and merits attention.

Continue reading →

Payments without borders: using ISO 20022 to identify cross-border payments in CHAPS

James Duffy and James Sanders

Understanding a payment’s journey around the globe can be difficult. As the operator of the UK’s high-value payment system (CHAPS), the Bank is all too familiar with this challenge. By leveraging the benefits of the newly introduced ISO 20022 standard for messaging, we have devised a new methodology to identify and classify cross-border CHAPS payments more effectively. This method reveals that international transactions form over half of CHAPS activity, and offers new insights into the global payment corridors for CHAPS payments. Gaining a deeper understanding of payment flows could assist policymakers in prioritising their efforts to reduce global barriers as they implement the G20 roadmap for enhancing cross-border payments.

Continue reading →

Bitesize: Understanding housing activity in real time

Christopher Hackworth, Nicola Shadbolt and David Seaward.

While official housing market statistics are relatively timely and high frequency, they usually come with a lag of at least one month. So indicators that lead official estimates are helpful for identifying turning points, or any ‘shocks’ to the economy.

Continue reading “Bitesize: Understanding housing activity in real time” →

Saving Liquidity in a Liquidity-abundant World: Why don’t banks use less liquidity when making high-value payments?

David Seaward.

CHAPS banks have oodles of liquidity and are not afraid to use it, as quantitative easing has meant banks accumulated unprecedented quantities of reserves. And in this liquidity-abundant world, banks are less likely to be concerned with how well they use tools for liquidity saving in the Bank’s Real-Time Gross Settlement (RTGS) infrastructure. And besides, the timings of liquidity-hungry payments are stubborn. They can’t always be retimed to optimise liquidity usage, and this means that the potential for liquidity savings in RTGS from the Bank’s Liquidity Savings Mechanism (LSM) is limited.

Continue reading “Saving Liquidity in a Liquidity-abundant World: Why don’t banks use less liquidity when making high-value payments?” →

Monies – Joining Economic and Legal Perspectives

David Bholat, Jonathan Grant and Ryland Thomas.

The economist John Kenneth Galbraith once quipped that the answers economists give to the question “what is money?” are usually incoherent. So in this blog we turn to law for some answers. Debate about the nature of money has been renewed by recent financial crises and the rise of digital currencies (Ali et al 2014; Desan 2014; Ryan-Collins et al 2014; Martin 2013). This was the focus of a panel session at the Bank’s recent annual conference on Monetary and Financial Law, which brought together lawyers and economists to develop interdisciplinary perspectives on topics such as money. It prompted us to think more deeply about how law does and does not constitute ‘it.’

Continue reading “Monies – Joining Economic and Legal Perspectives” →