Probe started into house purchase payments delay

Global banking officials are investigating the cause of a worldwide "payments issue" which delayed some high value and time sensitive money transfers, including house purchases for several hours.

Swift, the global financial artery that allows the smooth and rapid transfer of money across borders, said that it was taking the incident "extremely seriously" and apologised for the disruption caused.

Earlier, the Bank of England had warned that payments made via the CHAPS system, used by traditional UK High Street banks as well as international lenders, could be affected by a problem in the wider global payments network.

The Bank said the issue at Swift had been fixed after few hours.

Swift said the problem causing payments to be delayed for some customers had been caused by "an operational incident".

The problem was not cyber-related, it said.

"We are in contact with our customers to support them in mitigating the consequences on their operations and in turn on their own customers’ transactions," a statement said.

The issue did not affect ordinary debit and credit payments, cash machines or bank transfers.

The Bank of England said any outstanding payments which had been set to be transferred would be settled by the end of the day and advised anyone who was worried about a CHAPS payment to contact their bank.

"We are pleased to confirm that the third party supplier has restored service following their earlier issues, and CHAPS payments are settling as normal," the Bank said.

How CHAPS is used

Banks and lenders use the CHAPS system to transfer money between them. Overall, there are 200,000 payments via it every day in the UK, at a value of £363bn.

Several thousand financial institutions in the UK could have been affected, either directly or indirectly.

Individuals use it for high-value transfers such as house completions and the purchase of cars. On average there are around 4,000 housing transactions a day.

Andrew Montlake, from mortgage broker Coreco, said the situation earlier on Thursday had the "potential to be a nightmare scenario for home buyers on the day of completion, potentially leaving them and their removal vans all packed up with nowhere to go".

Where the problem started

The issue originated with part of the Swift system. It stands for Society for Worldwide Interbank Financial Telecommunication.

Created in 1973 and based in Belgium, Swift links 11,000 banks and institutions in more than 200 countries.

Not a bank in itself, it is a co-operative running an instant messaging system that informs users when payments have been sent and arrived.

It sends more than 40 million messages a day, as trillions of dollars change hands between companies and governments.