China Merchants Bank is the latest to join the Clearing House Payments Company's CHIPS network for wire payments. The deal makes China Merchants Bank the third international bank to connect to CHIPS in the past year. "China Merchants Bank is linking to CHIPS because of its proven capability to clear and settle payments quickly, securely and at low cost," said Hui Fang, general manager of China Merchants Bank's New York branch, in a statement. "CHIPS enables China Merchants Bank to meet the growing international needs of its customers."
CHIPS is a private-sector USD wire transfer system that is designed to streamline operations for financial institutions with features such as multilateral netting, a patented process that maximizes the use of liquidity without daylight overdraft charges. According to the Clearing House, a single dollar in the CHIPS system turns over on average 500 times a day and is used by the netting process to clear payments throughout the day.