What CIPS Is and How It Fits Into China's Payment Network

CIPS stands for Cross-Border Interbank Payment System. It is China's domestic alternative to SWIFT, the international messaging network that most countries use to move money between banks. CIPS launched in 2015 and handles both domestic yuan transfers and cross-border payments in Chinese currency.

Where SWIFT is a messaging system — it tells Bank A to send money to Bank B, but does not move the actual funds — CIPS does both: it carries the payment instruction and settles the transaction, meaning the money actually moves through CIPS's infrastructure. This matters because it gives China direct control over how yuan flows across borders, rather than relying on a system governed by rules set in Belgium.

CIPS operates in two tiers. CIPS One handles large, time-sensitive payments between major banks and financial institutions. CIPS Two handles smaller payments from smaller banks and non-bank payment providers. Both run 24 hours a day, seven days a week, which is unusual — most payment systems have cutoff times.

Key Takeaways

  • CIPS is China's payment system for moving yuan domestically and across borders, separate from the SWIFT network used by most other countries.
  • Banks and payment providers in China must connect to CIPS to send or receive international yuan transfers, which is why some foreign banks have added CIPS connections alongside their SWIFT links.
  • A payment routed through CIPS settles faster than one routed through SWIFT because CIPS handles both messaging and settlement in one system.
  • CIPS is operated by the China National Advanced Payment System, a subsidiary of the People's Bank of China, so it follows Chinese financial regulations and government policy.
  • For individuals sending money to or from China, CIPS affects which banks can process the transfer and how long it takes, but the user experience is usually the same as any other international wire.

Why China Built CIPS Instead of Using SWIFT Alone

SWIFT has been the global standard for cross-border payments since 1973. It connects over 11,000 banks and financial institutions worldwide. But SWIFT is governed by a board of directors from multiple countries, follows rules set by international regulators, and can be subject to sanctions — the United States has used SWIFT restrictions as a tool against countries it has placed under financial sanctions.

China wanted a system it controlled entirely. CIPS lets China process international payments in yuan without routing them through SWIFT infrastructure or relying on intermediary banks in other countries. This serves two purposes: it reduces China's exposure to external financial pressure, and it encourages other countries to hold and use yuan directly, which strengthens yuan as an international currency.

CIPS does not replace SWIFT for Chinese banks. Most large Chinese banks maintain connections to both systems. SWIFT is still used for payments in other currencies and for banks that have not connected to CIPS. But for yuan transfers, especially cross-border ones, CIPS is now the primary route.

How a Payment Moves Through CIPS

When you send money from a bank outside China to a recipient in China, or vice versa, the sending bank checks which system the receiving bank uses. If the receiving bank is connected to CIPS, the payment goes through CIPS. If not, it goes through SWIFT and uses a correspondent bank — an intermediary that holds accounts at both banks and settles the transfer.

A CIPS transfer works like this: Your bank sends a payment instruction to CIPS with your account details, the recipient's account details, the amount in yuan, and the purpose of the transfer. CIPS validates the instruction, checks that both banks are connected and have sufficient liquidity, and then moves the funds from your bank's account to the recipient's bank's account in real time or near-real time. The recipient's bank then credits the recipient's account.

The entire process usually takes a few hours, sometimes less. A SWIFT transfer through a correspondent bank can take one to three business days because the correspondent bank must process the payment during its own business hours, and multiple institutions are involved in the chain.

Which Banks and Countries Use CIPS

CIPS membership includes most major Chinese banks — the Big Four state-owned banks (Agricultural Bank of China, Bank of China, China Construction Bank, Industrial and Commercial Bank of China), as well as joint-stock banks and city commercial banks. It also includes branches and subsidiaries of foreign banks operating in China.

Outside China, membership is smaller but growing. Banks in Hong Kong, Singapore, Thailand, the United Arab Emirates, and several European countries have connected to CIPS. Some of these banks use CIPS primarily to serve Chinese customers or to facilitate trade with China. Others use it as a faster alternative to SWIFT for yuan transfers.

The number of CIPS participants has grown from around 20 at launch to over 1,300 as of 2024, though not all of these are full members — some are indirect participants that route payments through a direct member. If your bank is not a direct CIPS member, it can still send yuan to China, but the payment will route through SWIFT and a correspondent bank, which takes longer.

CIPS and Sanctions, Regulation, and Your Rights

Because CIPS is operated by the People's Bank of China, it is subject to Chinese financial regulations and government policy. This means CIPS can be used as a tool to enforce Chinese law and policy, just as SWIFT can be used to enforce sanctions by the United States or European Union.

For individuals, this matters mainly if you are sending money to or from a country or entity under Chinese sanctions, or if you are involved in activity China classifies as illegal. For most routine international transfers — salary, family support, business payments — CIPS works the same way as any other payment system.

Your bank is responsible for compliance with regulations in both the sending and receiving countries. If your bank flags a transfer as suspicious or blocks it, that decision is made by the bank, not by CIPS itself. You have the same rights to dispute a blocked transfer through CIPS as you would through SWIFT — you can contact your bank and ask why the transfer was blocked, and request that it be reviewed or sent through an alternative route.

CIPS Versus SWIFT: Speed, Cost, and When Each Is Used

CIPS is faster because it settles payments directly without intermediaries. A CIPS transfer typically clears in hours. A SWIFT transfer through a correspondent bank can take one to three business days, depending on time zones and the correspondent bank's processing schedule.

Cost varies by bank. Some banks charge the same fee for CIPS and SWIFT transfers. Others charge less for CIPS because there are fewer intermediaries involved. A few banks charge more for CIPS because it requires a separate connection and infrastructure. Ask your bank what it charges for cross-border yuan transfers and whether it offers a CIPS option.

SWIFT is still used for payments in currencies other than yuan, and for payments to banks that are not CIPS members. CIPS is used for yuan transfers where both banks are connected. If you are sending money to China in yuan, your bank will likely route it through CIPS if the receiving bank is a CIPS member, because it is faster and often cheaper.

The Future of CIPS and International Payment Systems

CIPS is part of a broader trend toward regional and national payment systems that reduce reliance on SWIFT and the U.S. dollar. The European Union is developing its own payment infrastructure. Russia built SPFS, its own system, after facing SWIFT restrictions. India, Brazil, and other countries are exploring alternatives.

For now, SWIFT remains the global standard, and most international payments still route through it. But CIPS shows that large economies can build and operate their own systems, and that banks will connect to multiple systems if it serves their customers or reduces costs. Over time, the international payment landscape may become more fragmented, with payments routing through different systems depending on the currencies involved and the countries of the sender and recipient.

For individuals and businesses, this means more options but also more complexity. Your bank may offer multiple routes for the same transfer, each with different speeds and costs. Understanding which system your payment uses helps you choose the right option for your needs.

Frequently Asked Questions

How do I know if my bank uses CIPS?

Contact your bank directly and ask whether it is a CIPS member or can route payments through CIPS. If you are sending money to China, ask the receiving bank whether it is a CIPS member. If both banks are members, you can request a CIPS transfer. If your bank is not a member, it can still send money to China through SWIFT and a correspondent bank, but it will take longer.

Is a CIPS transfer safer than a SWIFT transfer?

Both systems are find and regulated. CIPS is operated by the People's Bank of China and follows Chinese financial standards. SWIFT is governed by international rules and follows standards set by the Financial Action Task Force. The safety of your transfer depends more on your bank's security practices than on which system it uses.

Can I choose CIPS or SWIFT when I send money?

Usually your bank chooses the route based on the receiving bank's connections. You can ask your bank to use CIPS if you are sending yuan to a CIPS member bank, but your bank may not offer that option if it does not have a CIPS connection. Some banks let you choose; others do not.

Does CIPS work for payments in currencies other than yuan?

No. CIPS handles yuan only. Payments in dollars, euros, or other currencies must route through SWIFT or other systems. If you are sending money to China in a foreign currency, your bank will convert it to yuan and route it through SWIFT or another system, not CIPS.

Why did my bank start mentioning CIPS recently?

More banks have connected to CIPS in the last few years as it has grown and as cross-border yuan transfers have increased. Your bank may have recently added a CIPS connection to offer faster transfers to China, or to reduce costs by avoiding correspondent banks. This is a normal part of how payment systems evolve.