RTGS & LVPS 

Transfers and Clearing

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Similarities and differences between Real-Time Gross Settlement (RTGS) systems and Large Value Payment Systems (LVPS) in terms of transfers and clearing.


Similarities:

  1. High-value transactions: Both RTGS and LVPS are designed to handle high-value transactions, typically involving large amounts of money exchanged between financial institutions.
  2. Central bank involvement: Both systems are usually operated or overseen by central banks, ensuring the stability and reliability of the payment infrastructure.
  3. Systemically important: RTGS and LVPS are considered systemically important payment systems due to their role in the settlement of large-value transactions and their impact on the stability and efficiency of the financial system.
  4. Settlement risk mitigation: Both RTGS and LVPS aim to reduce settlement risk by providing timely and secure settlement of transactions among participating financial institutions.


Differences:

  1. Settlement mechanism: RTGS systems settle transactions individually and in real-time, meaning that each transaction is processed immediately and irrevocably. In contrast, LVPS typically use net settlement, where transactions are accumulated over a certain period and then settled in a single, netted amount at specific times during the day.
  2. Liquidity requirements: RTGS systems often require higher levels of intraday liquidity from participating institutions, as transactions are settled continuously throughout the day. In net settlement systems, like most LVPS, the need for intraday liquidity is generally lower, as transactions are settled in batches.
  3. Speed: RTGS systems offer immediate settlement, ensuring that funds are transferred in real-time between the accounts of participating institutions. LVPS using net settlement mechanisms may have a slower settlement process, as transactions are only settled at specific times during the day.
  4. Finality: In RTGS systems, settlement is final and irrevocable as soon as the transaction is processed. In some LVPS, settlement finality may only be achieved at the end of the settlement cycle when the netted amounts are transferred.

RTGS Systems

RTGS

RTGS systems use several message formats for communication between central banks and within their own systems. 

Here's a summary of the key message types used in RTGS-to-RTGS communications:

1. ISO 20022 messages: Many RTGS systems, including TARGET2 (operated by the European Central Bank), are migrating or have migrated to ISO 20022 message standards. Some common ISO 20022 messages used include:
   - pacs.008: Customer credit transfer
   - pacs.009: Financial institution credit transfer
   - pacs.010: Financial institution direct debit

   - camt.056: Payment cancellation request
   - camt.029: Resolution of investigation
   - camt.053: Statement message
   - camt.054: Debit/credit notification

2. Proprietary formats: Some RTGS systems still use their own proprietary message formats. For example, Fedwire (operated by the Federal Reserve) currently uses a proprietary format detailed in the Fedwire Application Interface Manual (FAIM).

3. SWIFT MT messages: While many systems are moving away from SWIFT MT messages, some still use them for certain operations. Common MT messages include:
   - MT103: Customer credit transfer
   - MT202: General financial institution transfer
   - MT900: Confirmation of debit
   - MT910: Confirmation of credit
   - MT950: Statement message

4. Specialized messages: Some RTGS systems use specialized messages for specific purposes:
   - MT096/MT097: Authorization request and response messages used in Y-Copy systems
   - xsys.001, xsys.002, xsys.003: Messages used in SWIFTNet Copy for ISO 20022 messages

Real-Time Gross Settlement (RTGS) transfers 

RTGS is a specialized funds transfer system used by banks and other financial institutions to process high-value and time-sensitive transactions. The system enables the immediate and continuous settlement of transactions on an individual, transaction-by-transaction basis. The main features of RTGS transfers are as follows:

  1. Real-time processing: In an RTGS system, transactions are processed and settled immediately as they are submitted, without any delay or waiting period. This real-time aspect ensures that funds are transferred quickly and efficiently between the participating institutions. The operational mechanics of the Real-Time Gross Settlement (RTGS) system commence when a remitting participant initiates a payment transaction by instructing the RTGS system’s managing center, typically situated within a central bank, to proceed with the settlement process. Upon successful execution of this process, the payment details are automatically relayed to the receiving participant. The settlement’s success or failure hinges on the adequacy of the remitting bank’s balance held at the central bank.
  2. Gross settlement: Unlike net settlement systems, which offset transactions against each other and settle the net amounts at specific intervals, RTGS settles each transaction individually and on a gross basis. This means that each transaction is settled in full, without being netted against other transactions.
  3. Finality and irrevocability: Once a transaction has been settled in an RTGS system, it is considered final and irrevocable. This means that the receiving bank has an unconditional claim on the funds, and the transaction cannot be reversed or canceled. This feature reduces settlement risk and ensures the stability and reliability of the financial system.
  4. High-value transactions: RTGS systems are typically designed to handle large-value transactions, often with no upper limit on the transaction amount. This makes RTGS an essential tool for settling transactions related to government securities, foreign exchange, and interbank transfers, among others.
  5. Continuous operation: Most RTGS systems operate continuously during business hours, allowing banks and financial institutions to process transactions throughout the day. Some systems even provide extended or 24/7 operating hours to accommodate different time zones and facilitate international transactions.
  6. Central bank involvement: RTGS systems are usually operated by central banks or under their supervision, ensuring the stability, security, and integrity of the system. Central banks also use RTGS systems for monetary policy implementation, such as managing the liquidity of the banking system and controlling short-term interest rates.
  7. Security and risk management: RTGS systems incorporate advanced security measures and risk management practices to protect against fraud, cyber threats, and operational risks. These measures may include encryption, secure messaging protocols, authentication and authorization controls, and real-time monitoring.
  8. Liquidity management: Since RTGS systems settle transactions individually and in real-time, they can require a significant amount of liquidity from participating institutions. To address this, central banks often provide intraday credit facilities, allowing banks to borrow funds on a short-term basis to cover their settlement obligations.


In summary, Real-Time Gross Settlement (RTGS) transfers are an essential component of the global financial system, enabling the immediate, continuous, and secure settlement of large-value transactions. RTGS systems provide real-time processing, gross settlement, and finality of transactions, ensuring the efficient movement of funds between financial institutions and reducing systemic risk.


T2, T2S, and TIPS

These are payment and securities settlement systems operated by the Eurosystem, which comprises the European Central Bank (ECB) and the national central banks of the Eurozone countries. Each system has a specific function in the processing and settlement of transactions within the European financial market.

T2 (TARGET2):
TARGET2 is the second generation of the Trans-European Automated Real-time Gross Settlement Express Transfer system. It is a real-time gross settlement (RTGS) system used for processing high-value euro transactions between banks and other financial institutions across Europe. T2 is operated by the Eurosystem and settles transactions in central bank money, providing immediate finality and reducing settlement risk.

Key features of T2 include:

  • Real-time processing and settlement of large-value euro transactions.
  • Ensuring the stability, security, and efficiency of the European financial system.
  • Facilitating the implementation of the Eurosystem's monetary policy.
  • Offering ancillary services such as liquidity management and collateral pooling.
  • Providing a harmonized platform for payment processing across the Eurozone.


T2S (TARGET2-Securities): 
TARGET2-Securities is a pan-European securities settlement platform that centralizes the settlement of securities transactions in Europe. It is operated by the Eurosystem and aims to improve efficiency, reduce fragmentation, and lower costs in the European post-trade landscape.

Key features of T2S include:

  • Centralized settlement of securities transactions in multiple currencies (mainly euro, but also other currencies such as the Danish krone).
  • Harmonization of securities settlement practices across participating European countries.
  • Facilitating cross-border settlement by connecting Central Securities Depositories (CSDs), which hold and settle securities transactions.
  • Reducing the complexity and costs associated with cross-border settlement.
  • Operating a delivery-versus-payment (DvP) mechanism, ensuring that securities are delivered only when the corresponding payment is made, which reduces counterparty risk.


TIPS (TARGET Instant Payment Settlement):
TIPS is a pan-European instant payment settlement service provided by the Eurosystem. It enables payment service providers to offer their customers instant euro payments, available 24/7/365, across the Single Euro Payments Area (SEPA).

Key features of TIPS include:

  • Instant settlement of euro payments, with transactions usually completed within seconds.
  • Availability of the service 24/7/365, facilitating real-time payments across Europe.
  • Use of the SEPA Instant Credit Transfer (SCT Inst) scheme, which sets the rules, standards, and processes for instant payments.
  • Settlement of transactions in central bank money, ensuring safety and security.
  • Low transaction fees, promoting the adoption of instant payments by financial institutions and customers.



In summary, T2, T2S, and TIPS are essential components of the European financial infrastructure, each serving a specific purpose in the processing and settlement of transactions. 

  • T2 is a real-time gross settlement system for high-value euro transactions, 
  • T2S is a centralized securities settlement platform, and 
  • TIPS is an instant payment settlement service. 


Together, they contribute to the stability, efficiency, and integration of the European financial market.


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T2 (Target2) Payment System

T2 is a payment system that enables EU banks to transfer money between each other in real time. This is known as real-time gross settlement (RTGS).

To understand what Target2 is please review the video, for the manual and glossary, click on the link. 

For transactions within the RTGS Systems extra fees will apply.

For further information on SSP, ICM, ECONS click here

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as well as 


T2 (TARGET2) is the Eurosystem's real-time gross settlement (RTGS) system for processing large-value payments and time-critical transactions in euros. The Eurosystem comprises the European Central Bank (ECB) and the national central banks (NCBs) of the Eurozone countries. TARGET2 is a crucial component of the European financial infrastructure, ensuring the secure, efficient, and rapid transfer of funds between banks and financial institutions within the Eurozone and beyond.

Here's an overview of how TARGET2 operates:

  1. Participation: T2 is accessible to banks, central banks, and other eligible financial institutions within the European Union (EU) and the European Economic Area (EEA). Additionally, non-European institutions may access T2 through a European-based bank that acts as their correspondent.
  2. Real-time gross settlement: Similar to other RTGS systems, T2 processes and settles transactions individually, on a gross basis, and in real-time. This means that funds are transferred and settled immediately between the participating banks without any delay or batching of transactions.
  3. Central banks' involvement: Banks participating in T2 maintain accounts with their respective national central banks (NCBs) or the European Central Bank (ECB). These central banks play a crucial role in facilitating the settlement of transactions through T2 by acting as the settlement agents.
  4. Single Shared Platform (SSP): T2 operates on a Single Shared Platform (SSP), which is a centralized technical infrastructure that processes payment orders for all participating banks and central banks. The SSP was developed and is jointly operated by three central banks: the Deutsche Bundesbank, the Banque de France, and the Banca d'Italia.
  5. Operating hours: T2 operates on all European Central Bank working days, typically from early morning until late evening (Central European Time), allowing banks and financial institutions to send and receive payments throughout the business day.
  6. Messaging and communication: T2 uses the SWIFT network and the ISO 20022 messaging standard for exchanging payment instructions and other messages between participating institutions. This standardized messaging format ensures the secure, efficient, and accurate exchange of payment information within the T2 system.
  7. Liquidity management: T2 provides various tools and mechanisms for banks to manage their liquidity effectively, such as intraday credit, standing facilities, and reserve requirements. This ensures the smooth functioning of the payment system and helps maintain financial stability within the Eurozone.
  8. Relationship with other payment systems: T2 operates alongside other payment systems, such as CHAPS, Fedwire, and CHIPS, which are used for large-value transactions in other currencies (e.g., British pounds, U.S. dollars). TARGET2 also interfaces with other European payment systems, like TARGET2-Securities (T2S), for the settlement of securities transactions.


In summary, T2 is the Eurosystem's RTGS system for processing large-value payments and time-critical transactions in euros. It operates on a Single Shared Platform, providing real-time gross settlement services to banks, central banks, and other financial institutions within the European Union and beyond. T2 plays a vital role in the European financial infrastructure, ensuring the secure, efficient, and rapid transfer of funds across the Eurozone.

How are direct debit operations performed in T2 (TARGET2) ?


TARGET2 (Trans-European Automated Real-time Gross Settlement Express Transfer System) is the Eurosystem's real-time gross settlement (RTGS) system for the euro, which is used for the settlement of large-value payments and time-critical transactions. It is managed by the Eurosystem, which comprises the European Central Bank (ECB) and the national central banks (NCBs) of the Eurozone countries.

In the context of wholesale operations, direct debit transactions refer to the process of transferring funds from one bank to another, with the payer's bank account being debited and the payee's bank account being credited. This typically involves large-value or high-priority transactions between banks or financial institutions.

Before a direct debit transaction can be initiated in TARGET2, the following steps need to be taken:

  1. SWIFT MT204 message: The initiating bank, which is the bank holding the account to be debited, sends a SWIFT MT204 message to the receiving bank (the bank holding the account to be credited). The MT204 message is a standardized message format for reporting a debit transaction, which includes information about the sender, the receiver, the transaction amount, currency, and other relevant transaction details.
  2. Receiving bank's response: Upon receiving the MT204 message, the receiving bank verifies the transaction details and either accepts or rejects the transaction. If the transaction is accepted, the receiving bank sends a confirmation to the initiating bank.
  3. Central banks' involvement: Both the initiating and receiving banks are required to hold accounts at their respective national central banks (NCBs) or the European Central Bank (ECB). The central banks play a crucial role in facilitating the settlement of the direct debit transaction through TARGET2.
  4. TARGET2 transaction processing: Once the receiving bank has confirmed the transaction, the initiating bank submits a payment order to its central bank, which forwards the order to  T2 (TARGET2). T2 processes the payment order in real-time and provides the final settlement of the transaction by transferring the funds from the central bank account of the initiating bank to the central bank account of the receiving bank.
  5. Compliance with BIS regulations: The Bank for International Settlements sets forth regulations and best practices for international financial transactions, which include direct debit operations in T2. They have been published by the Committee on Payments and Market Infrastructures (CPMI)  of the BIS to prevent fraud in wholesale operations.
  6. Central banks and participating banks in the TARGET2 system must adhere to these regulations to ensure the smooth and secure processing of transactions, as well as compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) requirements.


In summary, direct debit operations in T2 (TARGET2) involve the exchange of SWIFT MT204 messages between the initiating and receiving banks, the involvement of central banks for settlement purposes, and compliance with BIS regulations to ensure a secure, efficient, and transparent transaction process.


Our Electronic Settlement Accounts for large Volumes

Electronic settlement accounts facilitate the transfer of funds between different banks or financial institutions. The process often involves a central clearinghouse or a central bank that acts as an intermediary. Here's a simplified explanation of how it technically works:

1. Transaction Initiation: Customer A from Bank X wants to transfer money to Customer B in Bank Y.
2. Message Formation: Bank X formats a secure electronic message (often using standards like ISO 20022 or SWIFT) that includes all the transaction details like amount, destination account, etc.
3. Message Transmission: The message is transmitted to a central clearinghouse or directly to the central bank, depending on the system in place.
4. Verification and Validation: The clearinghouse or central bank validates the message and ensures that Bank X has sufficient funds to complete the transaction.
5. Debit and Credit: Once verified, the clearinghouse debits the settlement account of Bank X and credits the settlement account of Bank Y.
6. Notification: Both banks are notified of the successful settlement, and Bank Y credits the amount to Customer B's account.
7. Reconciliation: At the end of the day or another agreed period, banks reconcile their books to ensure all transactions are accounted for.
8. Archiving: Transaction records are archived for regulatory and auditing purposes.
9. Settlement Finality: Once the transaction is settled, it is irreversible.

The use of a central entity ensures trust, security, and smooth interoperability between different banking institutions.

RTGS-Systems in the world

Real-Time Gross Settlement (RTGS) systems are the backbone of the financial infrastructure for most countries, providing immediate settlement of high-value interbank transactions. The largest RTGS systems in the world are typically operated by the central banks of major economies. Some of these systems include:

  1. Fedwire (United States) – Operated by the Federal Reserve System
  2. TARGET2 (Trans-European Automated Real-time Gross Settlement Express Transfer System) – Operated by the Eurosystem, it is used by 19 countries within the Eurozone
  3. CHAPS (United Kingdom) – Operated by the Bank of England
  4. EIL-ZVTG (Russia) – Operated by the Central Bank of Russia
  5. RTGS (India) – Operated by the Reserve Bank of India
  6. BOJ-NET (Japan) – Operated by the Bank of Japan
  7. SIC (Switzerland) – Operated by the Swiss National Bank
  8. RITS (Australia) – Operated by the Reserve Bank of Australia


RTGS systems can be categorized based on different criteria, such as:

  1. Geographical coverage:
    a. Domestic RTGS systems, serving a single country (e.g., Fedwire in the United States, RTGS in India)
    b. Regional or international RTGS systems, serving multiple countries (e.g., T2 in the Eurozone)
  2. Currency used:
    a. Single-currency RTGS systems, settling transactions in a single currency (e.g., Fedwire, which settles transactions in USD)
    b. Multi-currency RTGS systems, capable of settling transactions in multiple currencies (e.g., CLS Bank International, which settles transactions in multiple major currencies)
  3. Type of participants:
    a. Central bank-operated RTGS systems, which serve mainly banks and financial institutions (e.g., Fedwire, T2)
    b. Private-sector-operated RTGS systems, which may cater to a broader range of participants (e.g., CLS Bank International)
  4. Range of services:
    a. RTGS systems focusing primarily on high-value interbank transactions (e.g., Fedwire, T2)
    b. RTGS systems offering additional services, such as securities settlement or retail payment services (e.g., BOJ-NET in Japan)

Other RTGS Systems

Real-time gross settlement (RTGS) is a type of electronic payment system that allows for the transfer of large sums of money between banks in real-time. RTGS is a high-value system that is typically used for large-value transactions, such as the transfer of funds between banks or the settlement of government securities.

One of the key benefits of RTGS is the speed at which it can process transactions. Because the system operates in real-time, funds are transferred almost immediately, allowing for a rapid settlement of transactions. This is in contrast to other types of payment systems, such as batch processing systems, which can take longer to settle transactions.

Another benefit of RTGS is its ability to handle high-value transactions. Because the system is designed to handle large sums of money, it is often used for the settlement of government securities and other high-value transactions. This makes it an important tool for maintaining the stability and efficiency of financial markets.

RTGS systems are operated by central banks or other financial institutions and are typically only available to financial institutions or other large organizations. In order to use an RTGS system, a financial institution must have an account with the central bank or other operating institution.

RTGS is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank. Once completed, real-time gross settlement payments are final and irrevocable. In most countries, the systems are managed and run by their central banks.


Overall, RTGS is a fast and efficient way to transfer large sums of money between banks and other financial institutions. Its real-time processing and ability to handle high-value transactions make it an important tool for maintaining the stability and efficiency of financial markets

Other real-time gross settlement (RTGS) Systems like Fedwire, Sorbnet2, etc.:

RTGS systems:

Angola | SPTR (Portuguese: Sistema de pagamentos em tempo real; Real-time Payment System)
Argentina | MEP (Spanish: Medio electrónico de pagos; Electronic Means of Payment)
Azerbaijan | AZIPS (Azerbaijan Interbank Payment System)
Australia | RITS (Reserve Bank Information and Transfer System)
Bahrain | RTGS[10] (Real Time Gross Settlement System)
Bangladesh | RTGS (Bangladesh Bank Payment Service Division)
Barbados | Central Bank Real Time Gross Settlement System (CBRTGS)
Bosnia and Herzegovina | RTGS
Belarus | BISS (Belarus Interbank Settlement System)
Bulgaria | RINGS (Real-time Interbank Gross Settlement)
Brazil | STR (Portuguese: Sistema de Transferência de Reservas; Reserves Transfer System)
Canada | The Canadian Large Value Transfer System  does not settle in gross, nor does in settle in real-time: it nets payments against each other for later settlement

China | China National Advanced Payment System (CNAPS) (also called Super Online Banking System)
Chile | LBTR/CAS (Spanish: Liquidación Bruta en Tiempo Real; Real-time Gross Settlement)
Croatia | HSVP (Croatian: Hrvatski sustav velikih plaćanja; Croatian Large Payment System)
Czech Republic | CERTIS (Czech Express Real Time Interbank Gross Settlement System)
Denmark | KRONOS
Dominican Republic | LBTR (Spanish: Liquidación Bruta en Tiempo Real; Gross Settlement in Real Time)
Egypt | RTGS
Eurozone | TARGET2
Fiji | FIJICLEAR
Hong Kong | Clearing House Automated Transfer System (CHATS)
Hungary | VIBER (Hungarian: Valós Idejű Bruttó Elszámolási Rendszer; Real-time Gross Settlement System)
Georgia | GPSS (Georgian Payment and Securities System)
India | RTGS
Indonesia | Sistem Bank Indonesia Real Time Gross Settlement (BI-RTGS)
Iran | SATNA (سامانه تسویه ناخالص آنی, Real-Time Gross Settlement System)
Iraq | RTGS (Real Time Gross Settlement System)
Israel | Zahav (Hebrew: זה"ב זיכויים והעברות בזמן אמת; Zahav Real-time Credits and Transfers)
Japan | BOJ-NET (Bank of Japan Financial Network System)
Jordan | RTGS-J
Kenya | Kenya Electronic Payment and Settlement System (KEPSS)
Korea | BOK-WIRE+ (The Bank of Korea Financial Wire Network, 한은금융망)
Kuwait | KASSIP (Kuwait's Automated Settlement System for Inter-Participant Payments)
Lebanon | BDL-RTGS (Banque Du Liban – Real Time Gross Settlement)
Macedonia | MIPS (Macedonian Interbank Payment System)
Macao | RTGS
Malawi | MITASS (Malawi Interbank Settlement System)
Malaysia | RENTAS (Real Time Electronic Transfer of Funds and Securities)
Mauritius | Mauritius Automated Clearing and Settlement System (MACSS)
Mexico | SPEI (Spanish: Sistema de Pagos Electrónicos Interbancarios; Interbank Electronic Payment System)
Morocco | SRBM (Système de règlement brut du Maroc; Moroccan Gross Settlement System)
Namibia | NISS (Namibia Interbank Settlement System)
New Zealand | ESAS (Exchange Settlement Account System)
Nigeria | CIFTS (CBN Inter-Bank Funds Transfer System)
Pakistan | RTGS (Real Time Gross Settlement System)
Paraguay | LBTR (Spanish: Liquidación Bruta en Tiempo Real; Gross Settlement in Real Time)
Peru | LBTR (Spanish: Liquidación Bruta en Tiempo Real; Gross Settlement in Real Time)
Philippines | PhilPaSS
Poland | SORBNET and SORBNET2
Qatar | Qatar Payment System (QPS)
Russia | BESP System (Banking Electronic Speed Payment System)
Romania | ReGIS
Saudi Arabia | Saudi Arabian Riyal Interbank Express (SARIE)
Singapore | MEPS+ (MAS Electronic Payment System Plus)
South Africa | SAMOS (The South African Multiple Option Settlement)
Sri Lanka | LankaSettle (RTGS/SSSS)
Sweden | RIX (Swedish: Riksbankens system för överföring av kontoförda pengar)
Switzerland | SIC (Swiss Interbank Clearing)
Taiwan | CIFS (CBC Interbank Funds Transfer System)
Tanzania | Tanzania Interbank Settlement (TIS)
Thailand | BAHTNET (Bank of Thailand Automated High Value Transfer Network)
Turkey | EFT (Electronic Fund Transfer)
UAE | UAE Funds Transfer System (UAEFTS)
Ukraine | SEP (System of Electronic Payments of the National Bank of Ukraine)
United Kingdom | CHAPS (Clearing House Automated Payment System)
United States | Fedwire
Uganda | Uganda National Interbank Settlement (UNIS)
Zambia | Zambian Interbank Payment and Settlement System (ZIPSS)
Zimbabwe | Zimbabwe Electronic Transfer and Settlement System (ZETSS)


RTGS systems, as their name suggests, facilitate the real-time settlement of large-value and high-priority transactions between participating banks and financial institutions. These systems are typically operated by central banks, which act as the settlement agent to ensure the secure, efficient, and accurate transfer of funds.

The process of transferring money between central banks through RTGS systems involves the following steps:

  1. Correspondent banking relationships: Central banks maintain correspondent banking relationships with each other, which allow them to hold accounts at other central banks. These accounts, known as nostro and vostro accounts, enable central banks to settle transactions in different currencies on behalf of their domestic financial institutions.
  2. Central bank RTGS systems: Each central bank operates its own RTGS system, which facilitates the settlement of transactions between the banks and financial institutions within its jurisdiction. Examples of RTGS systems include Fedwire (U.S. Federal Reserve), T2  (Eurosystem), and CHAPS (Bank of England).
  3. Cross-border transactions: When a bank or financial institution in one country needs to send funds to another bank in a different country, the transaction is routed through the central banks of both countries. The sending bank submits a payment instruction to its domestic central bank's RTGS system, which includes details such as the beneficiary bank, amount, and currency.
  4. Central bank communication: The sending central bank communicates the payment instruction to the receiving central bank, typically using a secure messaging network like SWIFT. This message includes the transaction details and any additional instructions required to facilitate the cross-border transfer.
  5. Settlement in the receiving central bank's RTGS system: The receiving central bank processes the payment instruction in its RTGS system and transfers the funds from its own account (held at the sending central bank) to the beneficiary bank's account (held at the receiving central bank). This step may involve a currency conversion if the transaction is denominated in a different currency.
  6. Confirmation and reconciliation: Once the transaction has been settled in the receiving central bank's RTGS system, both central banks reconcile the payment and send confirmation messages to the sending and receiving banks, indicating that the funds have been successfully transferred.


In summary, central banks facilitate the transfer of funds between each other using their respective RTGS systems, correspondent banking relationships, and secure messaging networks like SWIFT. This process enables the real-time settlement of large-value and high-priority cross-border transactions between banks and financial institutions in different countries, promoting the efficient and secure flow of funds across the global financial system.

For Transactions within the RTGS Systems extra fees will apply.

Fedwire

Fedwire, also known as the Fedwire Funds Service, is a real-time gross settlement (RTGS) system for large-value payments in the United States. It is operated by the Federal Reserve System, which is the central banking system of the United States. Fedwire enables participating banks and financial institutions to send and receive electronic funds transfers, typically for large-value transactions and time-critical payments, with immediate finality.

Here is an overview of how Fedwire operates:

  1. Participation: Fedwire is primarily used by banks, credit unions, and other financial institutions that maintain an account with the Federal Reserve. Additionally, certain government agencies and other eligible institutions can also participate in the system.
  2. Real-time gross settlement: Unlike some other payment systems that use netting to reduce the number of transactions, Fedwire processes and settles each transaction individually on a gross basis, in real-time. This means that the funds are transferred and settled immediately between the participating banks, without any delay or batching of transactions.
  3. Immediate finality: Payments made through Fedwire are considered final and irrevocable once processed. This provides a high degree of certainty for participating institutions and helps reduce settlement risk.
  4. Operating hours: Fedwire operates during extended business hours, typically from early morning until late evening on weekdays (excluding federal holidays). This allows banks and financial institutions to send and receive payments throughout the business day.
  5. Security and risk management: Fedwire employs robust security measures and risk management practices to ensure the integrity and stability of the system. This includes transaction limits, collateral requirements, and continuous monitoring to detect and prevent fraud, money laundering, and other illicit activities. Fedwire also adheres to regulatory standards and guidelines, including those established by the Federal Reserve and the Bank for International Settlements.
  6. Relationship with other payment systems: Fedwire operates alongside other payment systems such as CHIPS and SWIFT. While Fedwire is focused on real-time gross settlement of large-value transactions, CHIPS is a private-sector system that employs netting to increase efficiency in clearing large-value payments, and SWIFT is a global messaging network that facilitates cross-border payment communication.


Fedwire employs a specific messaging format known as the Fedwire Funds Format, which follows the International Organization for Standardization (ISO) 20022 standard for electronic data interchange between financial institutions. The Fedwire Funds Format uses a series of structured data elements, or "tags," that represent different pieces of information related to a payment instruction.Key components of a typical Fedwire Funds message include:

  1. Sender and receiver identification: This includes the American Bankers Association (ABA) routing numbers, also known as Routing Transit Numbers (RTNs), which are unique identifiers for the sending and receiving financial institutions.
  2. Type code: This is a three-digit code that specifies the type of payment instruction, such as a customer transfer, bank transfer, or a request for reversal.
  3. Amount: The transaction amount is specified in U.S. dollars, without any commas or other formatting characters.
  4. Sender's reference: This is an alphanumeric code, usually up to 16 characters long, provided by the sending institution to identify the transaction uniquely.
  5. Business Function Code (BFC): This code specifies the purpose or nature of the transaction, such as a settlement payment, a trade payment, or an intra-company transfer.
  6. Beneficiary details: This includes the name and account number of the beneficiary (the ultimate recipient of the funds), as well as the beneficiary's financial institution.
  7. Originator details: This includes the name and account number of the originator (the person or entity initiating the transfer) and their financial institution.
  8. Other information: Additional transaction-related information, such as remittance information, intermediary bank details, or special instructions, can be included as necessary.


Once a sending institution has prepared a message in the Fedwire Funds Format, it submits the message to the Federal Reserve via the Fedwire Funds Service. The Federal Reserve processes the payment instruction in real-time, and upon successful completion, sends a confirmation message to both the sending and receiving institutions.


In summary, Fedwire is an RTGS system operated by the Federal Reserve System that enables large-value, time-critical payments between participating banks and financial institutions in the United States. It processes and settles transactions individually on a gross basis, in real-time, and with immediate finality. Fedwire plays a crucial role in the U.S. financial system, ensuring the secure, efficient, and rapid transfer of funds between institutions.

IMAD/OMAD

The Input/Output Message Accountability Data (IMAD/OMAD) system is, similar to the UETR number with SWIFT GPI, a pivotal component in the realm of electronic funds transfers facilitated by the Federal Reserve Bank Services, specifically through the FedWire Funds Service. This system assigns a distinctive IMAD or OMAD number to every wire transfer transaction. These unique identifiers are instrumental in ensuring the traceability, accountability, and thorough investigation of wire transfers. 

 1. Definition and Purpose:

  • IMAD/OMAD: These acronyms stand for Input Message Accountability Data and Output Message Accountability Data, respectively.
  • Uniqueness: Each IMAD or OMAD number is unique to a specific wire transfer, ensuring that each transaction can be individually identified and tracked.
  • Traceability: These numbers facilitate the tracking of wire transfers throughout the payment process, from initiation to completion.


 2. Structure:
The IMAD/OMAD number typically consists of three components that provide specific information about the transaction:

  • Date (8 digits): The transaction date, which helps to identify the day on which the transaction was processed.
  • Source Identifier (8 digits, normally the ABA): A code that identifies the financial institution that initiated the transfer.
  • Sequence Number (6 digits): A unique sequence number assigned by the sending or receiving bank to ensure distinct identification.

 
3. Functionality:

  • Tracking: Banks and financial institutions use IMAD/OMAD numbers to track the status of wire transfers, ensuring they are processed correctly and timely.
  • Investigation: The unique nature of IMAD/OMAD numbers allows for efficient investigation of any discrepancies, tracking or issues that arise during the wire transfer process. This can include errors, delays, or suspected fraudulent activities.
  • Dispute Resolution: In the event of a dispute, the IMAD/OMAD number can be referenced to provide a clear, indisputable record of the transaction details.
  • Compliance: Financial institutions are required to maintain records of IMAD/OMAD numbers as part of their regulatory compliance obligations. This ensures that they can provide detailed reports and respond to inquiries from regulatory bodies or clients
  • Auditing: These numbers are crucial during audits, allowing auditors to verify that all transactions have been accurately recorded and processed.


CHAPS 

Clearing House Automated Payment System (CHAPS) operates within the Real-time Gross Settlement (RTGS) system of the Bank of England.

CHAPS is a high-value electronic payment system based in the United Kingdom that facilitates the instantaneous transfer of funds between participating financial institutions. It is designed for large-scale transactions, typically between banks, financial institutions, and corporations, and is used for a variety of purposes, such as settling financial market transactions, funding corporate loans, and managing treasury operations.

The CHAPS system operates within the Bank of England's RTGS infrastructure, which is responsible for settling payments in real-time and on a gross basis, meaning that transactions are settled individually without netting or bundling them with other transactions. This helps to reduce the risks associated with settlement delays and financial gridlocks.

Here is a step-by-step description of how CHAPS operates within the RTGS system:

  1. Initiation: A CHAPS participant (usually a bank or other financial institution) initiates a payment on behalf of its customer or for its own account. The payment details are entered into the CHAPS system.
  2. Validation: The CHAPS system validates the payment details, ensuring that the necessary information is provided and accurate, such as the beneficiary account details, payment amount, and other relevant information.
  3. Transmission: Once validated, the payment instruction is transmitted to the beneficiary's bank (the receiving CHAPS participant) through the SWIFT network, which is the global messaging system used for secure communication between financial institutions.
  4. Receipt: The beneficiary's bank receives the payment instruction, verifies the details, and prepares to settle the payment.
  5. Settlement: The payment is then settled within the Bank of England's RTGS system. The central bank adjusts the account balances of the two CHAPS participants involved in the transaction, crediting the beneficiary's bank account and debiting the sender's bank account in real-time.
  6. Confirmation: After the settlement is completed, both the sending and receiving CHAPS participants receive confirmation messages, indicating that the transaction has been successfully processed.
  7. Reporting: CHAPS participants are required to maintain records of their transactions, which are subject to periodic auditing and reporting requirements.


The CHAPS system is renowned for its speed, efficiency, and security, making it an indispensable tool for high-value payments in the UK financial system. It plays a crucial role in maintaining the stability and integrity of the financial markets, as it ensures that transactions are settled promptly and with minimal counterparty risk.

The China National Advanced Payment System (CNAPS) is primarily designed for domestic transactions within China. However, with the launch of the second-generation system, CNAPS II, cross-border payments and interactions with other RTGS systems around the world have become more efficient.

To facilitate transactions between CNAPS and other RTGS systems, the following processes are typically involved:

  1. Correspondent banking relationships: Banks in China and banks in other countries establish correspondent banking relationships. This means that a Chinese bank maintains an account with a foreign bank (and vice versa), enabling transactions between customers of both banks in their respective currencies.
  2. Nostro and Vostro accounts: These correspondent banking relationships involve maintaining Nostro and Vostro accounts. A Nostro account is an account held by a foreign bank with a domestic bank in the domestic bank's currency. On the other hand, a Vostro account is an account held by a domestic bank with a foreign bank in the foreign bank's currency.
  3. Messaging systems: The Society for Worldwide Interbank Financial Telecommunication (SWIFT) serves as the primary messaging system for secure communication between financial institutions. Payment instructions and transaction details are exchanged between banks using standardized SWIFT messages.
  4. Settlement: Once the payment instruction is received and verified, the transaction is settled through the respective RTGS systems. The domestic bank will settle the transaction in the domestic currency using the domestic RTGS system (e.g., CNAPS), while the foreign bank will settle the transaction in the foreign currency using the foreign RTGS system.
  5. Currency conversion: If the transaction involves different currencies, a foreign exchange transaction will take place. The foreign exchange rate will be agreed upon

CNAPS II

The CNAPS, which means “China National Automatic Payment System” in Chinese 中国现代化支付系统号 Is the real-time gross settlement (RTGS) system in China.

CNAPS, launched by the People's Bank of China (PBOC) in 2008, is a critical payment and settlement infrastructure that enables the instant transfer of large-value funds between participating financial institutions within China.

CNAPS operates on a real-time and gross basis, meaning transactions are settled individually without netting or bundling them with other transactions. This system reduces the risks associated with settlement delays and financial gridlocks, ensuring that funds are transferred promptly and securely.

The China National Advanced Payment System (CNAPS) is primarily designed for domestic transactions within China. However, with the launch of the second-generation system, CNAPS II, cross-border payments and interactions with other RTGS systems around the world have become more efficient.


To facilitate transactions between CNAPS and other RTGS systems, the following processes are typically involved:

  1. Correspondent banking relationships: Banks in China and banks in other countries establish correspondent banking relationships. This means that a Chinese bank maintains an account with a foreign bank (and vice versa), enabling transactions between customers of both banks in their respective currencies.
  2. Nostro and Vostro accounts: These correspondent banking relationships involve maintaining Nostro and Vostro accounts. A Nostro account is an account held by a foreign bank with a domestic bank in the domestic bank's currency. On the other hand, a Vostro account is an account held by a domestic bank with a foreign bank in the foreign bank's currency.
  3. Messaging systems: The Society for Worldwide Interbank Financial Telecommunication (SWIFT) serves as the primary messaging system for secure communication between financial institutions. Payment instructions and transaction details are exchanged between banks using standardized SWIFT messages.
  4. Settlement: Once the payment instruction is received and verified, the transaction is settled through the respective RTGS systems. The domestic bank will settle the transaction in the domestic currency using the domestic RTGS system (e.g., CNAPS), while the foreign bank will settle the transaction in the foreign currency using the foreign RTGS system.
  5. Currency conversion: If the transaction involves different currencies, a foreign exchange transaction will take place. The foreign exchange rate will be agreed upon 
    by the involved banks, and the corresponding amount will be converted into the beneficiary's currency before the final settlement.
  6. Confirmation and reporting: After the settlement is completed, both the sending and receiving banks receive confirmation messages, indicating that the transaction has been successfully processed. Banks are required to maintain records of their transactions, which are subject to periodic auditing and reporting requirements.


It is important to note that while CNAPS can interact with other RTGS systems through the processes mentioned above, the level of integration and interoperability can vary depending on regulatory frameworks, correspondent banking relationships, and the technological capabilities of the involved parties.

In recent years, there have been initiatives to enhance the integration and cooperation between CNAPS and other RTGS systems. For instance, China has been working to expand the global use of its currency (CNY) and has signed currency swap agreements with numerous countries, facilitating the direct exchange of CNY with other currencies, bypassing the need to use an intermediary currency like the US dollar.

Overall, the interaction between CNAPS and other RTGS systems relies on correspondent banking relationships, established messaging systems like SWIFT, and foreign exchange transactions to facilitate cross-border payments and settlements. Efforts are ongoing to improve the efficiency, security, and interoperability of these systems in the global financial landscape.

SIC

The Swiss Interbank Clearing (SIC) payment system serves as the central payment system for Switzerland. Operational since June 10, 1987, it is managed by SIX Interbank Clearing Ltd (SIC Ltd) under the auspices of the Swiss National Bank. The primary participants of the SIC system include Swiss banks and other financial market entities. 

In addition to large-value transactions, SIC also processes retail payments associated with services offered by financial market participants, such as bank transfers, card payments, and direct debits. The SIC system has experienced consistent growth since its inception, both in terms of transaction volume and the value of settled transactions.


For more information on the SIC system, refer to 'The Swiss Interbank Clearing (SIC) payment system - Report on the SIC System and Disclosure Report,' published jointly by the Swiss National Bank and SIC Ltd. The first section, titled 'Report on the SIC system,' provides details on the Swiss Interbank Clearing payment system. As a systemically important financial market infrastructure, the SIC system adheres to the CPMI-IOSCO Principles for financial market infrastructures (PFMI). The second section, 'Disclosure Report on the SIC system,' demonstrates the application of the relevant CPMI-IOSCO principles to the SIC system.

BOJ-NET

The Bank of Japan Financial Network System (BOJ-NET) is the Real-Time Gross Settlement (RTGS) system operated by the Bank of Japan. It serves as a critical component of the Japanese financial market infrastructure, enabling the safe and efficient settlement of Japanese Yen transactions among financial institutions in the country.

BOJ-NET facilitates the real-time settlement of large-value payments, such as interbank transfers, securities transactions, and central bank operations. Transactions are settled individually and in real-time, meaning that each payment is processed immediately and irrevocably, eliminating the risk of settlement delays or defaults.

Overview of how BOJ-NET operates:

  1. Transaction submission: Participant financial institutions submit their payment instructions to BOJ-NET, either directly or through a correspondent bank.
  2. Real-time processing: BOJ-NET processes payment instructions on a transaction-by-transaction basis. The system verifies the availability of sufficient funds in the sender's account before approving the transaction. Once approved, the funds are transferred immediately and irrevocably from the sender's account to the recipient's account.
  3. Settlement finality: Settlement in BOJ-NET is final and irrevocable. Once a transaction has been processed, it cannot be reversed or modified. This feature provides a high level of certainty and reduces settlement risk for participating institutions.
  4. Continuous operation: BOJ-NET operates continuously during business hours, ensuring that payment instructions can be submitted and settled in real-time throughout the day. This allows financial institutions to manage their liquidity more effectively and helps maintain the stability of the Japanese financial system.
  5. Central bank oversight: The Bank of Japan oversees the operation of BOJ-NET, ensuring the system's reliability, security, and compliance with regulatory requirements.

RITS

The Reserve Bank Information and Transfer System (RITS) is Australia's RTGS system, operated by the Reserve Bank of Australia. It facilitates the real-time settlement of high-value Australian Dollar transactions between participating financial institutions. RITS also serves as the settlement system for other Australian payment systems, such as the High-Value Clearing System (HVCS) and the Bulk Electronic Clearing System (BECS).

RITS facilitates the real-time settlement of large-value payments, such as interbank transfers, securities transactions, and central bank operations. Transactions are settled individually and in real-time, meaning that each payment is processed immediately and irrevocably, mitigating the risk of settlement delays or defaults.

Overview of how RITS operates:

  1. Transaction submission: Participant financial institutions submit their payment instructions to RITS, either directly or through a correspondent bank.
  2. Real-time processing: RITS processes payment instructions on a transaction-by-transaction basis. The system verifies the availability of sufficient funds in the sender's account before approving the transaction. Once approved, the funds are transferred immediately and irrevocably from the sender's account to the recipient's account.
  3. Settlement finality: Settlement in RITS is final and irrevocable. Once a transaction has been processed, it cannot be reversed or modified. This feature provides a high level of certainty and reduces settlement risk for participating institutions.
  4. Continuous operation: RITS operates continuously during business hours, ensuring that payment instructions can be submitted and settled in real-time throughout the day. This allows financial institutions to manage their liquidity more effectively and helps maintain the stability of the Australian financial system.
  5. Central bank oversight: The Reserve Bank of Australia oversees the operation of RITS, ensuring the system's reliability, security, and compliance with regulatory requirements.

Large Value Payment Systems (LVPS)

EURO1 is a distinctive private-sector large-value payment system designed for the settlement of high-priority, same-day euro transactions across Europe. The system is primarily geared towards the processing of high-value, time-sensitive transactions, both domestically and cross-border.

The system combines exceptional liquidity efficiency with the finality of each processed transaction, ensuring that 95% of EURO1 transactions settle in real-time at the system level and over 99% within 30 minutes.

Operating as a real-time gross settlement (RTGS)-equivalent net settlement system, EURO1 adheres to the highest oversight standards and is supervised by the European Central Bank in collaboration with the National Central Banks of the Eurosystem.

Launched in 1998, EURO1 was established to offer an efficient, secure, and cost-effective net settlement infrastructure for large-value euro payments, providing immediate finality for all processed transactions. Today, the system boasts 34 participant banks and processes an average of 180,000 payments per day, with a total daily value of approximately EUR 200 billion. With over 4,800 participant BICs, the system further extends its reach to more than 10,000 additional BICs through the EURO1/STEP1 Participants.

Continuous Linked Settlement (CLS) is a specialized global financial system designed to eliminate settlement risk in the foreign exchange (FX) market. Settlement risk, also known as Herstatt risk, arises when one party to an FX trade delivers the currency it sold but does not receive the currency it bought, often due to time-zone differences or counterparty default. CLS was established to address this risk and enhance the overall stability and efficiency of the global FX market.

CLS operates by using a payment-versus-payment (PVP) mechanism, which ensures that both sides of an FX transaction are settled simultaneously, eliminating the risk of one party not receiving its payment. This is achieved through a process called "multilateral netting," where CLS calculates the net payment obligations of its members for each currency, reducing the overall number and value of individual transactions that need to be settled.

Overview of how CLS operates:

  1. Submission: Member banks submit their FX trades to CLS, which are then matched and confirmed within the system. Each member bank has a designated settlement member, which is responsible for settling the payment obligations arising from the submitted trades.
  2. Multilateral netting: CLS calculates the net payment obligations for each member bank and currency, taking into account both the purchases and sales of each currency. This process significantly reduces the overall volume and value of transactions that need to be settled.
  3. Settlement: CLS settles the net payment obligations by simultaneously transferring funds between the settlement members' accounts held at central banks. This process ensures that both sides of an FX transaction are settled at the same time, eliminating the settlement risk.
  4. Reporting: CLS provides member banks with real-time updates on the status of their submitted trades, as well as end-of-day reports detailing their settlement activity.


CLS is owned by a consortium of leading international banks and is regulated by a group of central banks from countries whose currencies are eligible for settlement in the system. It currently settles payment instructions for 18 major currencies, covering the majority of global FX transactions.

CHIPS 

CHIPS (Clearing House Interbank Payments System) is a large-scale, private-sector United States Dollar (USD) clearing system that is operated by The Clearing House, a banking association and payments company owned by several large U.S. commercial banks. The system handles both domestic and international payments, clearing and settling an average of $1.8 trillion per day. CHIPS plays a vital role in the smooth functioning of the U.S. and global financial systems by facilitating secure, efficient, and rapid interbank transactions.

The main features and operation of CHIPS can be summarized as follows:

  1. Fast and final payments: CHIPS is a real-time electronic payment system, which means that it processes and settles transactions quickly, usually within seconds or minutes. The settlement of transactions in CHIPS is considered normally final, meaning that once the transaction is processed, it cannot be reversed. This provides certainty and reduces risk for participating banks.
  2. Efficient liquidity savings mechanism: CHIPS employs a patented algorithm that matches and nets payments, significantly increasing the efficiency of the clearing process. Netting is a process where multiple transactions between two parties are offset against each other, resulting in a single net payable or receivable amount for each participant. This reduces the overall number of transactions to be settled, which in turn lowers the amount of liquidity (cash or cash equivalents) required to settle these transactions. This is particularly beneficial for banks, as it helps them manage their liquidity more effectively and reduces the need for costly intra-day borrowing.
  3. Participation and eligibility: CHIPS is a membership-based system that is open to U.S. and international banks with a presence in the United States. To participate in CHIPS, banks must meet specific eligibility criteria, including financial strength, operational capability, and regulatory compliance. The Clearing House is responsible for overseeing and ensuring the compliance of its members.
  4. Security and risk management: CHIPS has robust security measures and risk management practices in place to ensure the integrity and stability of the system. This includes measures such as transaction limits, collateral requirements, and rigorous monitoring to detect and prevent fraud, money laundering, and other illicit activities. CHIPS also adheres to regulatory standards and guidelines, including those established by the Federal Reserve and the Bank for International Settlements.
  5. Complementary to other payment systems: CHIPS operates alongside other major payment systems, such as Fedwire, complementing their services and providing an alternative channel for large-value USD transactions. While Fedwire is a real-time gross settlement (RTGS) system operated by the Federal Reserve, CHIPS is a private sector system focused on netting transactions for increased efficiency.


In summary, CHIPS is a large-scale, private-sector clearing system for USD payments, both domestic and international. It provides fast and final payments, employs an efficient liquidity savings mechanism through a patented netting algorithm, and maintains high standards of security and risk management. CHIPS operates alongside other payment systems, serving as a crucial component of the U.S. and global financial infrastructure.




Similarities and differences between FED-wire and CHIPS transfers. 

Both of these systems are essential to the functioning of the US financial system, facilitating the movement of large sums of money between banks and other financial institutions.

  • FED-wire, or the Federal Reserve Wire Network, is a real-time gross settlement (RTGS) system operated by the Federal Reserve in the United States. It provides immediate, final, and irrevocable settlement of funds transfers between participating banks.
  • CHIPS, or the Clearing House Interbank Payments System, is a privately owned and operated high-value payment system. It is owned by The Clearing House, which is a consortium of the largest US banks and some international banks. CHIPS is not a real-time settlement system like FED-wire; rather, it is a net settlement system that processes and settles transactions in batches at designated times throughout the day.


Similarities between FED-wire and CHIPS:

  • Both are electronic funds transfer systems used to facilitate large-value transactions between banks and financial institutions in the United States.
  • Both are essential for the smooth functioning of the US financial system and are critical for maintaining the stability and efficiency of the US dollar as a reserve currency.
  • Both systems are subject to regulation and oversight by relevant authorities, such as the Federal Reserve and the Office of the Comptroller of the Currency (OCC).


Differences between FED-wire and CHIPS:

Ownership and operation: 

  • FED-wire is operated by the Federal Reserve, the central bank of the United States, while CHIPS is owned and operated by a private consortium of banks (The Clearing House).

Settlement mechanism: 

  • FED-wire is a real-time gross settlement (RTGS) system, providing immediate and final settlement for each transaction. CHIPS, on the other hand, uses a net settlement mechanism, in which payment orders are accumulated and offset against each other, with the net amounts being settled at designated times throughout the day.

Finality of transactions: 

  • FED-wire transactions are final and irrevocable once settled, while CHIPS transactions, although generally considered final, can be subject to unwinding in exceptional cases, such as fraud or technical errors, until the net settlement is completed.

Access: 

  • Access to FED-wire is generally limited to banks that have an account with the Federal Reserve, while access to CHIPS is limited to its member banks, which include both domestic and international financial institutions.

Volume and value of transactions: 

  • FED-wire typically handles a higher volume of transactions with lower average value compared to CHIPS, which handles fewer but larger transactions.

Use cases: 

  • While both systems are used for large-value transactions, FED-wire is commonly used for transactions like government securities settlements, and interbank transfers, while CHIPS is often used for international transactions, such as foreign exchange transactions and trade finance.


In conclusion, FED-wire and CHIPS are both essential components of the US financial system, playing crucial roles in facilitating large-value transactions. They share some similarities but have key differences in ownership, operation, and settlement mechanisms.


If you want to know more about how to transfer funds through the RTGS system to your accounts with us, please get in contact with our Head of Central Bank Relations Henry Kofi.