Clearing House Interbank Payments System

The Clearing House Interbank Payments System (CHIPS) is one of the largest privately owned clearing houses in the United States, facilitating payments over US$1 trillion per day in an estimated 250,000 payments between banks.

CHIPS explained

The Clearing House Interbank Payments System (CHIPS) is owned by banks and other financial institutions in the United States. The Federal Financial Institutions Examination Council states that “any banking organization with a regulated US presence may become owner and participate in the network”, thus any financial institution is able to become part of this network. CHIPS is a clearing house that specifically caters for large value payment transactions therefore only the most established and largest banks in America are active participants of CHIPS.

The Fedwire Funds Service and CHIPS are both primary networks in the United States that facilitate large sums of domestic and intentional US dollar payments. Prior to 1998 all financial institutions that held ownership of CHIPS were required to maintain a branch in New York City, however since then the regulations have been amended.

In order to become a participant of CHIPS, investors are required to register and establish a bank in the United States. It is advised to seek the assistance of a professional consultancy firm when seeking to start up and form a bank in order to ensure that the process is completed successfully. Through expert advice of experienced consultants, investors are able to acquire the relevant banking license in a professional and timely manner, whilst being in compliance with the jurisdictional regulations.