CHIPS, the electronic payment service provided by The Clearing House Payments Company, has formed a partnership with IntraNet to broaden its distribution in the US. The Clearing House Company says Intranet’s large base of customers creates a new opportunity for CHIPS to expand its reach domestically.
CHIPS is a real-time, final payment system used by financial institutions around the world to clear $1.3 trillion in payments each day. It features multilateral netting with payments finality – a patented process that maximizes the use of liquidity, which reduces daylight overdraft charges.
“Until now, accessing CHIPS has required an expensive software solution developed in-house or by a third-party funds transfer software developer, which proved to be a significant start-up barrier for U.S. financial institutions with low wire transfer volume,” says Hank Farrar, Senior Vice President of The Clearing House Payments Company responsible for CHIPS. “For years, these financial institutions have been asking for a way to access CHIPS, and I am delighted that, through IntraNet’s CHIPS module, we can offer this cost-effective solution to them.”
CHIPS is the only wire system able to support the inclusion of large amounts of remittance information with payments. CHIPS accommodates remittance information in a variety of universally accepted standards, such as ANSI X.12 820, UNEDIFACT and XML formats. This feature enables CHIPS’s participants to offer their business customers the unique ability to receive an integrated solution for moving payments and payment-related information. This simplifies the reconciliation process, along with providing immediate funds availability for large value payments.
CHIPS is a premier wire transfer system with exceptional performance, operating at nearly 100% uptime year after year and a straight-through-processing rate of over 94%. In addition to its unique, multilateral netting capability, CHIPS has flexible, web-based management tools that allow financial institutions to control their use of CHIPS, such as intra-day research of payments and the management and prioritization of payments within the system.
“A single dollar in the CHIPS system on an average day turns over 500 times and will be reused many times by the netting system to clear and settle payments throughout the day,” says Farrar. “This efficient use of funds is just one of the ways we’ve enhanced CHIPS to support the cash management needs of corporations.”
CHIPS has flexible web-based management tools that allow financial institutions to control their use of CHIPS, such as intra-day research of payments and the management and prioritization of payments within the system. In addition, CHIPS is the only large-value real-time payment system in the world able to support the inclusion of extensive remittance information with each payment – a feature that will become essential as high-value B-to-B electronic payments increase.
“We’re pleased to offer our financial institution clients another option for wire transfers,” says Paul Morris, Senior Vice President of IntraNet. “This interface dramatically improves a financial institution’s business case for CHIPS by eliminating the need for expensive custom software development and, at the same time, providing immediate operational redundancy. This release provides banks that have been thinking about joining CHIPS with a very cost effective entry level solution.”