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    EDI and B2B standards

    CHIPS payment data for international US dollar flows

    CHIPS (Clearing House Interbank Payments System), operated by The Clearing House, clears and settles large-value US dollar payments between banks, many of them international. Businesses reach CHIPS through their bank. ECOM builds the payment instructions banks accept and maps the reports they return.

    Operated by
    The Clearing House
    Used for
    Large-value US dollar payments, many cross-border
    Message standard
    ISO 20022
    Business access
    Through your bank
    Talk to an EDI/API Expert
    Where CHIPS fitsA hub diagram: your banks, CHIPS participants, correspondent banks and statements on one side; the ECOM B2B gateway with bank formats, ISO 20022 data and status in the middle; the ERP, treasury, payables and receivables on the other.Where CHIPS fitsPartners, the ECOM gateway and your systemsBANKING SIDEYour banksCHIPS participantsCorrespondent banksStatementsYOUR SYSTEMSERPTreasuryAccounts payableAccounts receivableECOM B2B gatewayCHIPSBank formatsISO 20022 dataStatus and statements
    Where CHIPS fitsA hub diagram: your banks, CHIPS participants, correspondent banks and statements on one side; the ECOM B2B gateway with bank formats, ISO 20022 data and status in the middle; the ERP, treasury, payables and receivables on the other.Where CHIPS fitsPartners, the ECOM gateway and your systemsBANKING SIDEYour banksCHIPS participantsCorrespondent banksStatementsECOM B2B gatewayCHIPSBank formatsISO 20022 dataStatus andstatementsYOUR SYSTEMSERPTreasuryAccounts payableAccounts receivable

    ECOM connects your finance systems to your banks; the banks use CHIPS between themselves.

    Expand diagram Download SVG

    Overview

    What CHIPS is

    CHIPS is a private payment system owned by large banks. It handles high-value US dollar payments, including a large share of cross-border dollar payments, and nets payments between participating banks so less money has to move to settle them.

    CHIPS uses ISO 20022 messages between participating banks. As with Fedwire, a company does not connect to CHIPS itself. It gives payment instructions to its bank, which decides how to route the payment, and receives status and statement reports.

    Where businesses use it

    • International supplier payments

      US dollar payments to overseas suppliers routed through correspondent banks.

    • Intercompany funding

      Moving US dollars between group companies in different countries.

    • Incoming international receipts

      Customer payments from abroad, reported on bank statements.

    Structure

    How a business payment reaches CHIPS

    Your ERP releases an approved payment. It becomes a payment instruction in your bank's format, for example an ISO 20022 pain.001 credit transfer, and is delivered over the bank's secure channel. The bank chooses the route, which may be CHIPS for a large dollar payment to another participating bank.

    Status reports and statements come back from the bank with the references and party details needed to confirm the payment and reconcile your accounts.

    A US dollar payment routed through CHIPSA sequence diagram: the ERP releases a payment, the ECOM gateway sends the payment instruction to your bank, the bank routes it through CHIPS to the beneficiary's bank, and status and statement reports come back to the ERP.A US dollar payment routed through CHIPSYour instruction, the bank's routingYour ERPECOM gatewayYour bankCHIPSApproved US dollar paymentPayment instruction (e.g. pain.001)CHIPS payment message (ISO20022)Status reportStatementPayment confirmed
    A US dollar payment routed through CHIPSA sequence diagram: the ERP releases a payment, the ECOM gateway sends the payment instruction to your bank, the bank routes it through CHIPS to the beneficiary's bank, and status and statement reports come back to the ERP.A US dollar payment routedthrough CHIPSYour instruction, the bank's routingYour ERPECOMgatewayYour bankCHIPSApproved US dollarpaymentPayment instruction (e.g.pain.001)CHIPS payment message(ISO 20022)Status reportStatementPayment confirmed

    You send the instruction to your bank. The bank routes the payment, and reports the result back to your systems.

    Expand diagram Download SVG

    In depth

    What connecting CHIPS-routed payments involves

    • Bank instruction formats

      Payments are built in the format each bank accepts. The bank, not the business, chooses whether CHIPS or another system is used.

    • Structured data

      ISO 20022 carries structured party names, addresses and purpose information that international payments need.

    • Screening data quality

      Complete and consistent party data helps banks process international payments without manual review.

    • Status and returns

      Bank status reports and returns update payments in your ERP.

    • Statements

      camt and BAI2 statements are mapped for reconciliation and cash positioning.

    • Security

      Files are encrypted in transit and signed where the bank requires.

    In practice

    Example: paying an overseas supplier in US dollars

    A US company pays an overseas supplier in US dollars. The instruction leaves the ERP with complete party data and the bank routes the payment.

    Example: paying an overseas supplier in US dollarsFive steps: approve the payment, map structured party data, send to the bank, the bank routes it, and the status and statement update the ERP.Example: paying an overseas supplier in US dollarsA practical example, step by step1ApprovePayables approvesthe payment in theERP.Step 12Map party dataSupplier name,address and bankdetails are mappedto structured fields.Step 23Send to thebankThe instruction goesto your bank over itssecure channel.Step 34Bank routes itThe bank routes thepayment, whichmay be throughCHIPS.Step 45ReconcileStatus andstatements updatethe ERP.Step 5
    Example: paying an overseas supplier in US dollarsFive steps: approve the payment, map structured party data, send to the bank, the bank routes it, and the status and statement update the ERP.Example: paying an overseassupplier in US dollarsA practical example, step by step1ApprovePayables approves the payment in theERP.Step 12Map party dataSupplier name, address and bank detailsare mapped to structured fields.Step 23Send to the bankThe instruction goes to your bank overits secure channel.Step 34Bank routes itThe bank routes the payment, whichmay be through CHIPS.Step 45ReconcileStatus and statements update the ERP.Step 5

    Good party data at step two is what keeps an international payment moving without manual review.

    Expand diagram Download SVG

    Connections

    How CHIPS connects your business

    • Banks

      Your banks' formats and channels are set up on the gateway.

    • ERP and treasury

      Payments and confirmations flow between your systems and the banks.

    • Receivables

      Incoming international receipts are applied using statement data.

    • Other payment formats

      ACH, wires and other instructions use the same gateway.

    ECOM

    How ECOM supports CHIPS

    ECOM supports CHIPS with dedicated implementation, mapping, communication and support teams, and with specialists who know the industries your partners work in.

    • Implementation team

      Plans the CHIPS setup with you, configures it on the gateway and runs the tests with your partners and systems.

    • Mapping team

      Builds and maintains the maps, code conversions and validation rules between partner data and your applications.

    • Communication team

      Sets up and monitors partner connections, certificates, keys and credentials, and coordinates changes with each partner.

    • Support team

      Watches the flows, investigates failed or missing documents, and works the issue through with you and your partner.

    For CHIPS in particular

    • Payment instructions in each bank's accepted format, including ISO 20022.
    • Status, returns and statements mapped to your ERP.
    • Vendor master data mapped to structured ISO 20022 party fields.

    Frequently asked questions

    What is the difference between CHIPS and Fedwire?

    Both move large-value US dollar payments between banks. Fedwire is operated by the Federal Reserve and settles each payment individually in real time. CHIPS is a private system operated by The Clearing House that nets payments between participants. Your bank chooses which to use.

    Can a business connect to CHIPS directly?

    No. CHIPS participants are banks. ECOM connects your systems to your bank, which routes the payment.

    Does CHIPS use ISO 20022?

    Yes. CHIPS uses ISO 20022 messages between participating banks.

    What does ECOM need to set this up?

    Your bank's payment and reporting specifications, its connection details and your approval workflow.

    Related pages

    Talk to an EDI/API Expert

    Tell us which partners, systems and CHIPS requirements you are working with. An ECOM specialist will review them with you and outline the setup, the maps and the tests.

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