Worldwide Automated Transaction Clearing House, or Watch, has boosted the number of banks committed to its development to 40, including eight of the largest 10 international banks.
The international automated clearing house initiative last week received initial financial commitments from an additional seven institutions: Bank of Scotland, Dresdner Bank of Germany, Royal Bank of Scotland, UBS of Switzerland, U.S. Central Credit Union, Wells Fargo & Co., and the Federal Reserve's retail payments office.
Watch, whose formation is being coordinated by the National Automated Clearing House Association, would be a bank-owned, nonprofit clearing house. It would use Internet communication protocols to create a low-cost cross-border payments network.
If successful, Watch could reduce the cost of cross-border transactions by 40%, according to Nacha officials. A single cross-border payment costs a corporation about $16, according to a 1998 study by Boston Consulting Group.
"WATCH is progressing swiftly, more like a business venture than a volunteer organization," said Joe Teves, the newly appointed chairman of Watch's steering committee and manager of disbursement products at Royal Bank of Canada.
Watch is hammering out details of its business requirements, specifications, and organizational governance. Officials said they expect to complete this phase of the project by June 2000. The next phase would be to select a third-party company to develop and run it.