ISO Format Credited as Clearing House Settles Record $2.6 Trillion on Black Friday

The Clearing House says its clearing/settlement system handled a record number of Black Friday transactions.

The organization’s CHIPS network settled and cleared 1,083,550 payments valued at $2.63 trillion to kick off the holiday shopping season last week, The Clearing House (TCH) said in a news release Monday (Dec. 2).

“There are several factors that contributed to Black Friday’s record volume,” the release said. “The CHIPS network is the premier USD clearing and settlement system for international payment activity, with 95% of CHIPS payments being the U.S. dollar leg of a funds transfer that begins or ends in another country.”

Many Black Friday transactions originated from overseas banks that don’t observe the Thanksgiving holiday. These transactions couldn’t be sent over wire systems in the U.S. on Thanksgiving, and were therefore part of the extra volume on Friday (Nov. 29). In addition, the CHIPS network typically sees greater volumes on the last business day of a month.

Another contributing factor: an uptick in volume following CHIPS’ adoption of the ISO 20022 message format in April, making it the first high-value payment system in the U.S. to do so.  The migration means that CHIPS messages now align with message formats used by similar payment systems, enhancing the efficiency and information content of cross-border payments for CHIPS participants and their customers.

“Financial institutions around the world rely on the CHIPS network to reliably clear and settle U.S. dollar payments,” said Richard Dzina, senior vice president for core product management at TCH.

“Black Friday’s record shows that the CHIPS network plays an integral part in facilitating efficient global trade and helps to maintain the U.S. dollar as the world’s leading reserve and settlement currency.”

Last month, TCH announced two milestones for its RTP® network, which set single-day records of 1.46 million transactions valued at $1.24 billion on Nov. 1. And in October, the network recorded 31.7 million transactions valued at $25.4 billion, respective increases of 6.2% and 9% over September.

Research by PYMNTS Intelligence from the report “Are Challenges Still Holding Back Instant Payments Adoption in the US?” found that 68% of businesses plan to adopt instant payments via RTP or the FedNow® Service over the next two years. This enthusiasm can be found in a range of different industries, such as retail and consumer (81%), hospitality and leisure (75%) and healthcare (70%)