From 14 May 2026, the maximum single transaction under the UK Faster Payments Service rose from £1 million to £5 million. The change, signed off by the Payment Systems Regulator in November 2025 and ratified by Pay.UK, ends a quiet but important threshold in UK business banking: above £1 million, the default route was CHAPS — slower, more expensive, but with stricter beneficiary verification baked in. The shift to £5 million Faster Payments capacity will displace an estimated 60% of CHAPS volume by mid-2027 (Pay.UK forecast). For business customers, the savings are real but so are the new failure modes.
What the £5m limit actually means
For UK businesses, this isn't simply a bigger version of what already existed. Four practical differences from the old £1m FPS world:
- Speed: Faster Payments are typically credited within 10 seconds. CHAPS settles in 2-4 hours during business day. For property completions, this is the difference between closing at noon and closing at 4pm with the seller missing their onward purchase.
- Cost: CHAPS payments cost businesses £25-£35 per transaction at most UK banks. Faster Payments are usually free or include up to 100 transactions per month free. For a property law firm doing 200 completions per month, that's £6,000+/month in savings.
- Confirmation of Payee (CoP) coverage: All major UK banks now offer CoP for FPS up to £5 million as of May 2026. Previously CoP coverage was patchy above £1 million.
- Bulk processing limits unchanged: This is the trap. The single transaction limit is £5m but daily limits at most banks remain £250,000-£500,000 for standard business accounts, and require manual upgrade calls. Many businesses are finding their first attempt at a £2 million payment blocked.
The fraud angle nobody's discussing publicly
Authorised Push Payment (APP) fraud against UK consumers and businesses cost £459 million in 2024 (UK Finance). Of that, 78% was Faster Payments. With the £5m limit, the average successful APP fraud value will rise — even if frequency holds steady, total losses will grow. The new mandatory reimbursement rules (PSR Cb-2024-001) cap consumer reimbursement at £415,000 per claim from October 2024, but BUSINESS APP fraud has no such reimbursement requirement. Businesses sending £4 million to a fraudster impersonating a property seller still bear the loss themselves in nearly all cases.
The CFO checklist for May-June 2026
- Confirm the bank's actual daily and per-transaction limit on your accounts. The £5m headline is regulatory capacity. Your specific business banking package will have lower limits unless explicitly upgraded.
- Reconcile your business banking pricing. If you have a CHAPS-bundled package paying £400-£800/month for unlimited CHAPS, that bundle is now worth much less. Renegotiate or shift to a Faster Payments-first business account.
- Implement two-person authorisation above £100,000 at minimum. Most cases of large APP fraud bypass single-signature controls but get caught by independent dual approval.
- Train accounts payable staff on Confirmation of Payee yellow/red flag responses. CoP returning "match unsuccessful" or "close match" should mandatorily trigger a verbal callback to a number sourced independently — not from the email demanding payment.
Open Banking VRP is the medium-term winner
The £5m FPS limit is the public-facing change. Behind it, Variable Recurring Payments (VRP) — the third-party-initiated subset of Open Banking payments — are quietly displacing Direct Debits in the UK B2B space. VRP got commercial rollout in late 2024 and is now used by 8 of the top 20 UK utilities for business billing. By 2027, much of the recurring £50,000-£200,000 monthly business payment volume that was historically Direct Debit will be VRP. The £5m FPS upgrade is a stepping stone in that direction, not the destination.
What this means for the banks
UK banks lost approximately £180 million in CHAPS revenue between 2022 and 2025 as the £1m FPS limit cannibalised mid-sized payments. The £5m increase will accelerate that to perhaps £500 million per year by 2028. Expect renewed efforts from incumbent banks to bundle FX, lending and risk products into business banking packages where the payment fee itself can no longer be charged at meaningful spread.
For most UK businesses, the practical outcome of the May 2026 change is faster payments, lower costs, marginally higher fraud exposure. The fundamental shift is structural — the UK retail/business payments stack now has three tiers (FPS up to £5m, CHAPS for above, Bacs for low-cost batch) where it had two for most of the past decade. CFOs who read this carefully in May save real money; those who don't will discover the daily limits the hard way mid-completion.