Modulr Becomes the First Non-Bank with Direct Access to all three UK Payment Rails

Modulr has become a direct participant in CHAPS, the UK's high-value payment scheme, settling sterling directly at the Bank of England rather than through a sponsor bank. The move makes the London payments firm the only non-bank payment service provider connected directly to all three of the country's major payment schemes: Faster Payments, Bacs and CHAPS.

The distinction matters because direct CHAPS access has historically been the preserve of banks. There are fewer than 40 direct participants in the scheme, and the list is dominated by the largest domestic and international lenders. Modulr, authorised as an electronic money institution rather than a bank, now sits alongside them at the settlement layer.

Why does direct CHAPS access matter for a non-bank?

CHAPS is the plumbing beneath the UK's most time-critical money movement: property completions, corporate treasury flows, interbank settlement and any transfer where finality on the same day is non-negotiable. In 2025 the system settled £93.9 trillion across a record 53.3 million payments, an average of £371.3 billion every working day, according to Bank of England data.

Until now, a non-bank wanting to offer CHAPS payments had to route them through a sponsor bank that held the settlement relationship. That arrangement introduces a dependency: an intermediary layer that adds cost, can slow execution and represents a single point of failure if the sponsor's own systems falter. By settling directly at the central bank, Modulr removes that layer for its CHAPS flows, taking direct control of execution and liquidity for high-value payments in the same way it already does for real-time and bulk transfers.

Modulr completed direct participation in Faster Payments and Bacs several years ago, becoming one of the first non-banks to do so under a Bank of England settlement-account policy that opened central bank accounts to a wider set of firms. Adding CHAPS completes the set.

How does this fit the wider shift in UK payments infrastructure?

The announcement lands at a moment when scaling payment firms are treating proximity to settlement as a competitive asset rather than back-office plumbing. The Bank of England's renewed real-time gross settlement platform, RT2, went live in April 2025 with a deliberately simpler and more proportionate onboarding process, designed to support a substantial increase in the number of CHAPS direct participants. The central bank has said the next joining slots are likely in 2026 and has been actively courting eligible firms.

That has drawn a cluster of new entrants toward the clearing layer. Banking Circle is set to become one of the first new joining banks as a direct CHAPS participant following the RTGS renewal, and ClearBank already sits on the direct participant list. What separates Modulr in the current field is that it reaches the same settlement infrastructure without holding a banking licence, a structurally different position from the banks joining alongside it.

The economics driving the trend are straightforward. As payment expectations move toward real-time and always-on models, every intermediary between a provider and the central bank adds latency, cost and operational risk. Firms handling growing transaction volumes increasingly conclude that owning the settlement relationship outright is cheaper and more resilient than renting it.

What does Modulr's scale look like?

Modulr processes more than 200 million transactions and over £180 billion in payment value on an annualised basis, serving over 6,000 businesses ranging from fast-growing SMEs to global enterprises. The firm reached full-year profitability in 2025 as it entered its tenth year, and in January 2026 launched in the United States through a partnership with FIS, providing technology for the American group's Money Movement Hub.

Its regulatory footprint spans two jurisdictions: authorised as an electronic money institution in the UK by the Financial Conduct Authority and in Europe by De Nederlandsche Bank. As a founding shareholder of the UK Payments Initiative, Modulr also offers commercial Variable Recurring Payments, the account-to-account scheme launched in mid-2026 as an alternative to Direct Debit and card billing for high-volume collections.

Why This Matters to FinanceX Readers

Direct scheme access is becoming the dividing line between payment firms that control their infrastructure and those that depend on someone else's. For finance professionals and investors watching the sector, Modulr's completion of the three-scheme set signals how far the boundary between banks and non-banks has moved at the settlement layer, and how deliberately the Bank of England is widening the gate.

As the central bank pushes CHAPS toward extended and eventually near-continuous settlement hours later this decade, the firms already holding their own settlement accounts will be positioned to exploit always-on infrastructure first. For a non-bank, sitting directly at the Bank of England is no longer a curiosity; it is fast becoming table stakes for anyone serious about scaling institutional payment volume.