Clearing House Interbank Payments System
CHIPSACTIVEOperator: The Clearing House (TCH)
Overseer: Board of Governors of the Federal Reserve System, New York State Department of Financial Services
Legal basis: Designated as a systemically important Financial Market Utility (FMU) under Dodd-Frank Title VIII
Launched: Jan 1, 1970
Quick reference: View technical card →
Executive Summary
CHIPS is a large-value USD payment system operated by The Clearing House, processing approximately $1.8 trillion daily. It serves as the primary clearing system for international US dollar payments and cross-border transactions. Unlike Fedwire's pure RTGS model, CHIPS uses a hybrid approach: continuous bilateral and multilateral netting throughout the day, with final settlement via Fedwire. This netting reduces the actual settlement amount to approximately 5% of gross value, dramatically reducing liquidity requirements for participants.
How It Works
Settlement Model
Hybrid: continuous netting with final settlement in central bank money via Fedwire
Message Standard
ISO 20022 (migrated April 8, 2024; first full calendar year under new standard in 2025)
Max Transaction
No limit
Clearing Mechanism
Continuous bilateral and multilateral netting algorithm — the core innovation of CHIPS. Netting reduces ~$1.8T gross to ~$90B net settlement.
Settlement Cycle
Operating hours: 09:00–18:00 ET, Mon-Fri. Continuous bilateral and multilateral netting throughout the day. Final settlement via Fedwire at end of day. Prefunding required at start of day. CHIPS rules last updated April 21, 2025.
Message Flow
The sending participant submits a payment message to CHIPS. CHIPS holds the message in queue and continuously attempts bilateral and multilateral netting against other pending messages. When a netting opportunity is found, offsetting payments are released simultaneously with zero funding requirement. Remaining payments are released against prefunded positions or additional funding. At day's end, residual net positions are settled via Fedwire.
Typical Use Cases
Cross-border USD payments, FX settlement, correspondent banking, international trade finance, syndicated loan payments, eurodollar transactions
Key Data
Participants & Access
Membership Requirements
Limited to commercial banking organisations with a significant volume of USD payments. Must meet capital, operational, and risk management requirements. Currently ~43 direct participants, all major global banks.
Governance & Risk
Governance Model
Owned and operated by The Clearing House. Governed by CHIPS Rules and Administrative Procedures. Subject to Federal Reserve and NYDFS oversight. Participant risk committee oversees credit and operational risk.
Concentration Risk
Very high — CHIPS processes the majority of international USD payments. Participant base is concentrated among large global banks. Designated as systemically important FMU. Disruption would affect global USD liquidity.
Resilience & Business Continuity
TCH operates redundant processing sites. Prefunding and closing position requirements limit settlement risk. End-of-day settlement via Fedwire provides central bank money finality. Regular contingency testing.
Dispute Resolution
CHIPS Rules govern inter-participant disputes. Once a payment is released through netting, it is final and irrevocable.
Pricing
CHIPS pricing is based on transaction volume and messaging fees. Specific fee schedules are shared with participants.
Source: The Clearing House
Connectivity
settles via
Fedwire
CHIPS daily net positions are settled via Fedwire in central bank money
Peer Comparison
CHIPS is unique among major payment systems due to its netting model — neither T2 nor CHAPS use netting (both are pure RTGS). CHIPS processes more cross-border USD transactions than Fedwire. The netting efficiency (~95% reduction) is CHIPS's key advantage, significantly reducing liquidity requirements for participants.
Compare in detail →Regulatory Framework
Apr 1, 2025
CHIPS ISO 20022 migration complete
CHIPS completes migration to ISO 20022 message format, aligning with Fedwire’s March 2025 migration.
Jul 1, 2025
IFR interchange cap review
European Commission review of IFR interchange caps. Possible changes to inter-regional and cross-border interchange rates. May address UK-EEA post-Brexit rate increases.
Nov 1, 2025
SWIFT ISO 20022 mandatory for cross-border
All cross-border SWIFT payments must use ISO 20022 (MX messages). MT messages no longer accepted for cross-border payments. Affects all 11,000+ SWIFT member institutions worldwide.
Apr 1, 2026
RBI mandatory two-factor authentication for all digital payments
RBI guidelines published Sep 25, 2025 requiring all domestic digital payments to implement two-factor authentication. Replaces rigid SMS OTP mandate with flexible risk-based approach. At least one factor must be dynamic and unique per transaction. Cross-border CNP additional factor validation required from Oct 1, 2026.
Jun 30, 2026
Visa USDC settlement expansion
Visa expanding USDC stablecoin settlement on Solana and Ethereum to more markets. Enables 7-day settlement and near-instant cross-border merchant payouts.
129dNov 14, 2026
SWIFT CBPR+ structured address mandate
SWIFT mandates structured postal addresses in all CBPR+ ISO 20022 messages. Unstructured address fields will no longer be accepted for cross-border payments. Financial institutions must ensure all counterparty address data is structured. Industry reports suggest ~44% of banks are behind schedule for Nov 2026 deadlines.
357dJun 30, 2027
UK post-Brexit cross-border interchange review
UK PSR reviewing Visa/Mastercard cross-border interchange increases post-Brexit. UK→EEA debit rose to 1.15%, credit to 1.50% after Brexit.
723dJun 30, 2028
Fedwire extended operating hours
Fedwire expanding to 22 hours/day, 6 days/week, 365 days/year. Significant change for correspondent banking and cross-border payment windows.
Intelligence (124)
NewsJul 8, 2026
SWIFT Consumer Payments Scheme Goes Live at Four UK Banks
Barclays, HSBC, Lloyds, and NatWest went live on SWIFT's cross-border consumer payment framework on July 1, the first UK banks to adopt the new retail transfer scheme.
NewsJul 8, 2026
India and Indonesia Announce UPI-QRIS Cross-Border Payment Link
Prime Minister Modi and President Prabowo agreed on July 7 to connect India's Unified Payments Interface with Indonesia's QRIS payment standard for cross-border retail transactions.
AnalysisJul 7, 2026
Sri Lanka's LankaSettle Completes ISO 20022 Migration, Settles 85 Percent of Non-Cash Value
The Central Bank of Sri Lanka replaced its legacy RTGS in March 2024 with an ISO 20022-compliant platform built by Montran. LankaSettle serves 35 participants and handles the country's large-value payments, government securities, and retail payment net obligations.
NewsJul 4, 2026
Bolsonaro Proposes Barring PIX From Non-Western Payment Networks Ahead of USTR Tariff Deadline
Senator Flavio Bolsonaro submitted a proposal to USTR on July 2 to restrict PIX cross-border integration with non-Western settlement systems as Brazil faces a July 15 deadline for US tariff action under Section 301, drawing immediate rejection from President Lula.
NewsJul 2, 2026
SWIFT Payments Scheme Goes Live with 25 Banks Across 11 Cross-Border Corridors
SWIFT activated its consumer cross-border payments framework at the end of June 2026, with more than 25 banks processing live transactions across corridors linking 11 countries including five of the world's ten largest remittance markets.
NewsJun 30, 2026
Pakistan's Raast Processes 742 Million Transactions in Q1 2026 as Digital Payments Dominate Retail
Raast handled 742 million instant payment transactions in Q1 2026. Growth rates project annual throughput above USD 500 billion.
NewsJun 16, 2026
Zelle Picks India for First International Corridor, Launches ZLUSD Stablecoin
Early Warning Services will enable Zelle users to send remittances to India by end of 2026, the P2P network's first international corridor. EWS also unveiled ZelleUSD, a dollar-backed stablecoin to power further cross-border expansion.
NewsJun 12, 2026
Zelle Announces India Remittance Corridor and ZelleUSD Stablecoin for International Markets
The company also unveiled ZelleUSD, a proprietary U.S. dollar-backed stablecoin for international markets. Zelle processed over $1.2 trillion in domestic payments in 2025.
NewsJun 12, 2026
17 US Banks Commit to Clearing House Tokenized Deposit Settlement Network
TCH's blockchain-based deposit tokenization platform, backed by JPMorgan, Citigroup, Bank of America, and 14 other financial institutions, will connect on-chain settlements to existing CHIPS and RTP rails. The target launch is the first half of 2027.
NewsJun 10, 2026
European Banks Lag on OCT Inst as TIPS Cross-Border Settlement Goes Live
Mastercard Move settled the first non-bank cross-currency instant payments through TIPS on June 1, completing EUR-DKK transactions atomically in central bank money. Ten multinational banks including Barclays, Deutsche Bank, and J.P.
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