Direct Clearing Capability for Pound Sterling-Denominated Payments Marks Another Major Milestone for BNY Mellon's New Global Payments Infrastructre
BNY Mellon, a global leader in investment management and investment services, is now a Direct Participant and shareholder in the Clearing House Automated Payment System (CHAPS).
CHAPS is a UK payments system that processes and settles both systemically important and time-dependent payments in sterling. As a Direct Participant, BNY Mellon will use its enhanced global payments infrastructure to send and receive sterling payments settled on the same day. One of only six US banks to join the CHAPS board, BNY Mellon brings the payments system's total membership to 21.
As a Direct Participant, BNY Mellon will be able to provide additional benefits to clients, notably in the areas of payment solution efficiency and flexibility, reporting and information management. By allowing for same-day settlement and eliminating reliance on correspondent banks, Direct Participant membership will improve the efficiency of BNY Mellon's payment services. This is part of BNY Mellon's continuing rollout of its new global payments infrastructure — other milestones earlier this year include enhanced euro direct clearing and expanded London-based multicurrency payments.
"Our new infrastructure is being designed to ultimately enable us to process any payment, anywhere, on a single platform, irrespective of its value, currency or clearing mechanism," said Ian Stewart, chief executive officer of BNY Mellon's Treasury Services group. "By using our new infrastructure as a Direct Participant of CHAPS, we can deliver to corporate and correspondent banking partners the high levels of service for sterling-denominated payments that distinguish us as an elite processor of US dollar payments."
"Direct Participant membership in CHAPS in conjunction with our new payments infrastructure enables us to provide high-value electronic payment solutions that are even more responsive to client needs across all of BNY Mellon's businesses," said Brian Shea, president, Investment Services, and head of Client Service Delivery and Client Technology Solutions at BNY Mellon. "Delivering even stronger levels of cash and risk management tools to clients with sterling-denominated transactions will add an important new dimension to BNY Mellon's nearly century-long presence in the UK."
Financial institutions with over two per cent of the average daily total payment activity (by value), processed daily by CHAPS could potentially be invited to become Direct Participants1. Based on current daily values, BNY Mellon will clear more than £11 billion, which is equivalent to more than four per cent of the average daily value of CHAPS2. CHAPS processes over 92 per cent of all intra-bank payments (by value) in the UK3. Over £70 trillion was processed through the system in 20134.