CHIPS ( Clearing House Interbank Payments System ) is an American private telecommunications clearing house designed for large transfers. By 2010, about 250,000 transfers totaling over $ 1 trillion of US dollars per day were carried out using this system. Today, CHIPS, together with Fedwire's fund management system, forms the main US network for large domestic and international payments. For the latter, the market share of CHIPS is up to 96%. In 2015, the volume of transfers reaches $ 1.5 trillion per day [1] . Transfers through the system are made in accordance with Section 4A of the United States Trade Code .
Unlike Fedwire , which is part of the official regulatory authority, CHIPS is owned by a financial institution. For transfers that are not so sensitive to posting time, banks prefer to use CHIPS instead of Fedwire, since CHIPS services are cheaper (both in terms of prices and in terms of required funds). One reason is that Fedwire is a gross settlement system, and CHIPS allows net settlement.
Differences from Fedwire
CHIPS differs from Fedwire in three key ways. Firstly, this is a private payment system, while Fed is part of the official regulatory authority. Secondly, it has only 47 members (along with some merged banks, which are separate participants) compared to 9,289 banking institutions that were authorized to send and receive funds through Fedwire as of March 2009 [2] . Thirdly, it is a netting system that does not work in real time.
Notes
- ↑ CHIPS (inaccessible link) . Date of treatment January 1, 2016. Archived March 20, 2017.
- ↑ Fedwire Participant Directory Archived February 10, 2010.