The Clearing House (TCH) has said its clearing and settlement system CHIPS will implement the ISO 20022 message format as planned by November of next year, a press release said Thursday (May 26), which will make cross-border payments and messaging more efficient.
TCH is committed to improving CHIPS by migrating to ISO 20022, an international standard for electronic data messaging between financial institutions. This will enhance the efficiency of payments processing, and let participants and end users get value from enriched data content and structured message formats.
It will also help support the dollar as a global reserve and settlement currency.
The press release noted that CHIPS is “the premier USD clearing platform” for international payment activity, with 95% of the payments using cross-border services.
The November 2023 message format conversion will help CHIPS messages get into the same format as other big payment systems, which will improve efficiency and information content to cross-border payments with TCH.
The release says CHIPS is used to settle around $1.8 trillion in payments per day, and it uses liquidity savings algorithm matches to offset payments.
See also: TCH’s Immediate X-Border Payments Pilot Eyes Payroll, Remittances
Russ Waterhouse, executive vice president for product development and strategy for TCH, said real-time payments are evolving in order to meet expectations for fast and accessible cross-border payments.
The report notes that CBDC- and blockchain-driven cross-border pay methods are “solutions in search of a problem.” But it says there’s a need to change the domestic payment options in place and enhance cross-border payments.
That could be done by making for better messaging between banks and access borders.
Waterhouse said there are shifts going on with consumer expectations, with the stage being set for an embrace of instant cross-border pay.
The report says a pilot program, IXB, which is a collaboration between TCH, EBA Clearing and SWIFT, will work on leveraging instant payments and real-time messaging into a variety of new use cases.
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