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Financial institutions often use the Fedwire and CHIPS systems to handle both the message traffic and the actual movement and settlement of the funds. Institutions typically use the SWIFT system for communicating message instructions among financial institutions relating to the funds transfer.

Modern payment systems use cash-substitutes as compared to traditional payment systems. This includes debit cards, credit cards, electronic funds transfers, direct credits, direct debits, internet banking and e-commerce payment systems.

Payments Cash (bills and change): Cash is one of the most common ways to pay for purchases.Personal Cheque (US check): These are ordered through the buyer's account.Debit Card: Paying with a debit card takes the money directly out of the buyer's account.Credit Card: Credit cards look like debit cards.

A SWIFT message works anywhere geographically across the SWIFT system. And a CHIPS message works anywhere across the CHIPS system.

CHIPS is slower but less expensive than the other major interbank clearing house known as Fedwire, making it more amenable to larger transactions that can take longer to clear. CHIPS works by netting debits and credits across transactions, providing both clearing and settlement services to its customer banks.

The Clearing House Interbank Payments System (CHIPS) is the largest private sector USD clearing system for wire transfers. Contents. Along with its public sector counterpart, Fedwire, CHIPS forms the primary network for transferring and settling payments in US dollars.

The FedNow Service is a new instant payment service that the Federal Reserve Banks are developing to enable financial institutions of every size, and in every community across the U.S., to provide safe and efficient instant payment services in real time, around the clock, every day of the year.