What is Clearing House Interbank Payments System?

Legal Definition
The Clearing House Interbank Payments System (CHIPS) is a United States private clearing house for large-value transactions. By 2015 it was settling well over US$1.5 trillion a day in around 250,000 interbank payments in cross border and domestic transactions. Together with the Fedwire Funds Service (which is operated by the Federal Reserve Banks), CHIPS forms the primary U.S. network for large-value domestic and international USD payments where it has a market share of around 96%). CHIPS transfers are governed by Article 4A of Uniform Commercial Code.

Unlike the Fedwire system which is part of a regulatory body, CHIPS is owned by the financial institutions that use it. For payments that are less time-sensitive in nature, banks typically prefer to use CHIPS instead of Fedwire, as CHIPS is less expensive (both by charges and by funds required). One of the reasons is that Fedwire is a real-time gross settlement system, while CHIPS allows payments to be netted.
-- Wikipedia
Legal Definition
Electronic funds moving system. Handles over 95 percent of all international dollar payments. Located in New York City, CHIPS settles transactions in special account balances as adjustments at the Federal Reserves Bank of New York City. Refer also to SWIFT.