What Is CIPS? A Guide to China's Cross-Border Payment System

Imagine being able to pay a Chinese supplier or send remittances in yuan as easily as paying your local vendors. It might sound impossible, but CIPS has helped streamline how cross-border payments to China are settled.

If you’re sourcing products from China or are looking for a fast way to transfer money in Chinese yuan (RMB), understanding how CIPS works is increasingly relevant.

But what exactly is CIPS, and what role does it play? In this article, we’ll explain the basics of CIPS, including how the system works, its differences from SWIFT, and why it matters for businesses handling RMB transactions.

The Cross-Border Interbank Payment System (CIPS) is a payment infrastructure designed in China to support the clearing and settlement of cross-border transactions in RMB. Launched in 2015, it operates under the authorisation and oversight of the People’s Bank of China (PBOC).

The system allows participating banks and financial institutions to process international RMB payments directly within China’s financial system, instead of relying only on offshore clearing arrangements. This makes it possible for RMB payments to be settled onshore through a framework built specifically for cross-border use.

The scale of the network has expanded steadily over time. As of November 2025, there are 190 direct participants and 1,567 indirect participants, with institutions located across 124 countries and regions.

Within China’s financial system, CIPS sits alongside other core market infrastructures, including domestic payment systems such as CNAPS. Its scope is limited to cross-border RMB settlement and does not extend to domestic retail payments or multi-currency transactions.

CIPS operates as a clearing and settlement system for cross-border RMB payments at the interbank level. It allows participating financial institutions to exchange payment instructions and settle RMB transactions onshore within China’s banking system.

Only financial institutions can access CIPS, either as direct or indirect participants.

Direct participants are typically banks with settlement accounts connected to China’s interbank payment infrastructure. They can submit payment instructions to CIPS, settle transactions on their own behalf, and provide clearing services to other banks.

Indirect participants do not connect to CIPS directly. Instead, they access the system through correspondent relationships with direct participants, which handle clearing and settlement on their behalf.

A typical cross-border RMB payment through CIPS generally follows this process:

• Payment initiation: A payer instructs their bank to send funds in RMB to a recipient bank.
• Message transmission: The payment instruction is transmitted through agreed financial messaging channels used by participating banks, which may include SWIFT-based connectivity or other approved solutions.
• Clearing and settlement: CIPS processes the transaction according to its operating rules and settles the RMB funds onshore between participating institutions.
• Confirmation: Settlement confirmation is sent to the relevant banks once the transaction is completed.

CIPS supports multiple settlement mechanisms, including real-time gross settlement (RTGS) and deferred net settlement (DNS), giving participating banks flexibility in how they manage liquidity depending on transaction type and timing.

CIPS and SWIFT are sometimes confused because both are involved in international payment processes and interbank financial messaging.

However, while the SWIFT network facilitates international payments through a global financial messaging system, CIPS is a payment system that clears and settles cross-border transactions in Chinese yuan. SWIFT itself does not provide clearing or settlement services.

Let’s take a closer look at the differences:

While CIPS has its own messaging capabilities, it continues to work with SWIFT to support connectivity and standardised financial messaging, particularly for institutions that are not directly connected to CIPS. This cooperation helps ensure interoperability within the existing global payments framework, rather than replacing it.

CIPS provides a dedicated infrastructure for clearing and settling cross-border payments in Chinese yuan (RMB). In practice, this can offer advantages in specific situations, while also presenting clear constraints that businesses and financial institutions should understand.

In practical terms, CIPS offers a few notable advantages:

• RMB payments can be settled onshore: CIPS enables real or near real-time settlement of cross-border RMB payments. This can reduce processing time compared to traditional international wire transfers.
• Fewer intermediaries in some payment flows: CIPS processes and settles payments without the need for intermediary banks, reducing transaction and handling fees, as well as foreign exchange costs.
• Payments can be processed across global time zones: With the rollout of CIPS Phase 2 in May 2018, the system now operates on a 5×24 + 4-hour schedule. This allows RMB payments to be processed during the working hours of major financial markets worldwide.

At the same time, there are clear limitations to keep in mind:

• It only applies to RMB transactions: CIPS applies only to transactions denominated in Chinese yuan and does not support multi-currency settlement. As such, the system only benefits businesses with financial flows involving China.
• No direct access for businesses: Companies and individuals cannot access CIPS directly. Payments must be routed through participating banks, meaning availability and execution depend on each bank’s infrastructure and payment routing.
• Continued reliance on existing networks: Although CIPS provides clearing and settlement for RMB payments, cross-border transactions may still rely on established financial messaging networks, depending on how the banks involved are connected.

CIPS provides a framework for clearing and settling cross-border payments in RMB, particularly for trade and financial activity involving China. 

As of May 2025, CIPS-related services had processed over CNY 675 trillion (about USD 94 trillion) in cumulative payment transactions, highlighting its scale in RMB-denominated settlement.

In recent years, CIPS has been referenced more frequently in discussions about international payment systems. Organisations such as the International Monetary Fund have observed gradual diversification in global payment flows, while noting that the US dollar remains the dominant currency worldwide.

Put simply, CIPS does not replace existing global payment networks, and its future significance largely depends on how often businesses and banks choose to use RMB for cross-border payments.