CHIPS stands for Clearing House Interbank Payments System, and it’s the largest private-sector, US dollar-based, money transfer system in the U.S. It’s a privately operated, and bank owned, system for electronic payments that are transferred and settled in US dollars.
As a competitor and customer of the Fedwire service of the Federal Reserve, CHIPS allows banks to make transfers of international payments efficiently, as there’s no need for bank checks.
When it comes to large transactions, CHIPS is the main clearing house in the United States. By using electronic bookkeeping entries, it settles, on average, more than $1 trillion USD every day. The average transaction using CHIPS is over $3,000,000.
Many people prefer CHIPS to the Fedwire service because it’s more affordable, even though it isn’t as fast. Transfers could be made internationally or domestically, but they’re usually very large sums.
The limitations of CHIPS
One of the main limitations associated with CHIPS is the fact that it only operates from 9:00 a.m. to 5:00 p.m. Eastern Time. As of 2016, there were just 48 member banks in CHIPS whereas roughly 50,000 member banks use the Fedwire system.
A Better Way to Transfer: OFX
At OFX, we provide international money transfers at a fraction of the cost of using your bank or traditional wire transfer services. With our online platform, you can transfer any amount, no matter how large or small, and you can do it 24/7, because we’re open all day, every day.
- We can send to 190 countries using 50+ different currencies.
- Sending more than $5,000 USD? You won’t incur any transaction fee. Sending less than $5,000 USD? You’ll pay a mere $5 fee.
- Your transfer will go through securely and swiftly, typically anywhere from just 1-2 business days once we receive your funds. Plus you can use our risk management tools, to protect your transfer from currency volatility.
Ultimately, we make it easy and affordable to transfer your money to wherever it needs to go. So rather than relying on systems like CHIPS, take complete control over every transfer by creating an OFX account today.