Huntington Bank Joins CHIPS Network to Bolster High-Value Payments

NEW YORK – The Huntington National Bank has joined The Clearing House’s CHIPS network, the largest private-sector U.S. dollar clearing and settlement system in the world. The move, announced this month, allows the major regional bank to directly clear and settle high-value domestic and cross-border payments, signaling a broader strategic shift among financial institutions to enhance payment resilience and liquidity management. CHIPS, which stands for Clearing House Interbank Payments System, is a critical piece of U.S. financial infrastructure, settling an average of over $1.8 trillion in payments daily. It specializes in large-value, time-sensitive transactions, such as those required for international trade, corporate treasury payments, and financial market settlements. By becoming a direct participant, Huntington gains the ability to send and receive these payments on its own behalf and for its clients without relying on a larger correspondent bank as an intermediary. This transition from an indirect to a direct participant is a significant operational and strategic undertaking. Previously, like many other regional banks, Huntington would have routed its high-value wire transfers through a larger, money-center bank that was a direct member of the CHIPS network. While functional, this tiered arrangement introduces operational dependencies and potential points of failure. A disruption at the intermediary bank could delay or halt payments for all the smaller institutions that rely on it. Financial regulators and industry bodies have long been focused on mitigating these so-called “tiering risks.” A 2019 analysis from the Bank for International Settlements on the UK's similar CHAPS system highlighted how heavy concentration in a small number of large sponsor banks could cause systemic issues to spread quickly across the financial system during an operational or financial crisis. By increasing the number of direct participants, the overall network becomes more distributed and resilient. For Huntington, the move is part of a larger trend where payment infrastructure is no longer viewed as simple plumbing but as a core component of strategy. Direct access to CHIPS provides greater control over payment flows, reduces counterparty risk, and can lead to significant liquidity efficiencies. Banks can manage their funding requirements more precisely and recycle capital faster with earlier settlement windows. “The addition of Huntington Bank to the CHIPS network reflects the continued demand for liquidity-efficient, resilient and reliable payment infrastructure,” said Michael Knorr, Senior Vice President of CHIPS Product Management at The Clearing House, in the announcement. Knorr noted that direct participation “enables participants to reduce funding demands while supporting growing payment volumes, creating meaningful economic value for banks and their clients.” This development has direct implications for the small and mid-sized businesses that bank with Huntington. Direct access to the CHIPS network means their large and time-critical payments are processed with fewer intermediaries, reducing the potential for delays and errors. For a mid-sized company managing a complex supply chain or engaging in international commerce, the speed and finality of a payment can have a direct impact on operations and relationships with vendors. Furthermore, this move positions Huntington to compete more effectively on sophisticated treasury management services. The bank recently announced a new API-first treasury ecosystem designed to provide businesses with integrated, automated, and real-time control over their payments and liquidity. Direct access to a high-value payment system like CHIPS is a foundational element for delivering these advanced capabilities, enabling features like real-time payment tracking and more precise cash-flow forecasting for business clients. In our experience, many business owners view their company’s payment processing capabilities as a purely technical concern delegated to their bank. However, a move like Huntington’s highlights why this is a critical strategic issue. For any company that regularly handles large transactions, whether for acquisitions, capital equipment purchases, or significant vendor payments, the underlying resilience of its bank's payment infrastructure is a major factor in its operational stability. A single delayed or failed payment can freeze a supply chain, damage a key business relationship, or trigger a liquidity crisis. This is not just back-office plumbing; it is a core component of a company's financial risk management. We help clients assess these operational and financial risks within their banking relationships to ensure their treasury functions are built on a solid foundation. To discuss how your company's treasury operations can be made more resilient, contact C&S Finance Group LLC at csfinancegroup.com. Looking ahead, the evolution of U.S. payment systems is expected to continue accelerating. With the adoption of new messaging standards like ISO 20022 and the push for extended operating hours, the distinction between various payment rails will continue to blur. As this occurs, more regional and mid-sized banks may follow Huntington’s lead in seeking direct access to core infrastructure to remain competitive and meet the increasingly sophisticated demands of their commercial clients.