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
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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.
40dJun 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.
177dNov 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.
405dJun 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.
771dJun 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 (104)
AnalysisMay 20, 2026
Switzerland's euroSIC Shutdown Ends 28 Years of Domestic EUR Clearing
SIX Group will discontinue euroSIC on December 31, 2027, removing Switzerland's dedicated EUR-denominated RTGS after 28 years of operation. The transition requires Swiss financial institutions to redirect EUR interbank payments through eurozone correspondent banking or direct TARGET participation.
AnalysisMay 20, 2026
Bancomat, EPI, and MB WAY Validate Cross-Border QR Merchant Payments in EuroPA's First Proof of Concept
La Banque Postale, Intesa Sanpaolo, and 28 Portuguese financial institutions comprising MB WAY's membership provided operational support for the validation.
AnalysisMay 18, 2026
Malaysia's DuitNow QR Doubles to Three Billion Transactions in 2025 as Cross-Border Corridors Expand
Cross-border QR transactions grew 2.5 times to 29.7 million in 2025. A bilateral QR payment corridor with Cambodia launched during the year, joining existing links with Singapore, Thailand, Indonesia and China. India is expected to connect in 2026.
NewsMay 18, 2026
RTP Network Sets Single-Day Records: 2.27 Million Transactions Worth $8.62 Billion on May 1
The Clearing House reported a new RTP Network single-day high on May Day 2026, adding another volume signal to the US instant-payments market while RTP and FedNow continue to develop around different participant and use-case patterns.
NewsMay 15, 2026
RTP Network Processes Record 2.27 Million Transactions on May Day
The Clearing House reported on May 14 that its RTP network set new single-day highs for both volume and value on May 1, as tax refund disbursements and corporate treasury adoption accelerate U.S. instant payment growth.
AnalysisMay 15, 2026
Fedwire and CHIPS Both Start Q1 2026 Above 2025 Baselines
First-quarter 2026 data from the Federal Reserve and The Clearing House shows both Fedwire and CHIPS running above their 2025 daily averages, with CHIPS posting stronger relative gains in settled value.
RegulationMay 11, 2026
Brazil Bars Stablecoin Settlement in Cross-Border Payments Effective October 2026
The resolution addresses companies that had incorporated stablecoin settlement into their cross-border payment flows. Brazil's crypto market processes an estimated USD 6 to 8 billion per month.
AnalysisMay 11, 2026
EuroPA Alliance Validates Cross-Border QR Payment Interoperability Between Italian, Portuguese, and Wero Networks
The result moves the EuroPA alliance closer to its production milestones. Cross-border peer-to-peer payments between member schemes are scheduled for 2026. Extension to e-commerce and NFC-based point-of-sale interoperability is planned for 2027.
NewsMay 8, 2026
China and Indonesia Launch Cross-Border QR Payment Corridor Linking 120 Million Merchants
Indonesian users gained reciprocal access to over 80 million QR payment points in China. Settlement uses a direct IDR/CNY mechanism that bypasses the US dollar.
NewsMay 8, 2026
India and Vietnam Sign Cross-Border QR Payment Agreement During State Visit
NPCI International and Vietnam's NAPAS agreed on May 6 to enable cross-border QR code interoperability, adding Vietnam as UPI's fourth Southeast Asian expansion market alongside Singapore, Malaysia, and Cambodia.
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