Worldwide Automated Transaction Clearing House (Watch), a banking industry-owned company that is developing an electronic network for batch-based low value payments, has selected Swift to provide the payment processing engine for the proposed cross-border system.
It is envisaged that the Watch payment engine will receive a payment file from a sending bank in either that bank's national payment system format or an accepted international format. The engine will then convert the file into the formats of the destination countries and distribute the payments to the local clearing systems.
Watch has selected Nacha - the US-based electronic payments association - to provide administrative support for the company. Vendors for other components of the Watch system, such as settlement and customer service, will be selected after the close of the respective request for proposal periods for those functions.
Brian Mecklem, chairman of Watch and general manager of global payments systems, National Australia Bank, says increasing globalisation of business has created the demand for a more efficient and cost-effective means of executing cross-border payments. "Implementation of the Watch system will reduce the costs of cross-border payments substantially through automation, straight through processing and economies of scale," says Mecklem.