CHIPS Celebrates 40 Years
The Clearing House Interbank Payments System (CHIPS) will celebrate its 40th anniversary on 6 April. A private-sector, real-time wire transfer network, CHIPS processes 350,000 payments daily with a value of US$1.5 trillion.
“Since it went live on 6 April 1970, CHIPS has dramatically changed the landscape of payments systems and has become a critical part of the global economic infrastructure,” said Rossana Salaris, senior vice preseident (SVP), payments products, The Clearing House. “What began as nine participants trading payments not in excess of US$10,000 is now a network of 48 leading financial institutions representing 22 countries that is responsible for 95% of all international US dollar clearing.”
The concept for CHIPS originated in 1966, when the Bank Operations Conference of the New York Clearing House Association (predecessor to The Clearing House) identified the need to provide a quicker and more efficient alternative to official cheques used for interbank payments. As part of a feasibility study on automating such payments, a computer system test was performed to determine whether electronic signals could act as a proxy for the paper transfer of funds between banks. This successful experiment became CHIPS.
“CHIPS is the industry standard for wire system liquidity, resiliency and operational efficiency in a wire transfer system and has been an important part of our customer value proposition since it was launched,” said Frank Behlmer, executive vice president (EVP), chief operating officer (COO), global operations, BNY-Mellon.