A bank-backed initiative to develop a global electronic network for transferring low-value cross-border payments has been put on hold due to waning financial interest in the project.
The Worldwide Automated Clearing House (Watch), was set up in July 2000, and is owned by financial institutions representing 11 countries and seven currencies.
The organisation had already selected interbank messaging network Swift to provide the processing engine for the system and was using the offices of US-based payments association Nacha for administrative support. But the project failed to win sufficient financial support from banks and has been indefinitely shelved.
In a statement, the group says: "While the board is still firmly committed to the Watch concept and design, the response, to date, by financial institutions indicates that it may be an idea that is slightly ahead of its time."
Construction of the actual system will be delayed "until the marketplace has developed sufficiently to justify the investment", says the group.
Watch board members remain convinced that there is a growing demand for cross-border payments, and that the project will eventually be resurrected to support those transactional flows. They point to recent research by the Association for Financial Professionals which suggests that 57% of corporate treasurers in the United States alone would be likely or very likely to use a global ACH system.
Watch supporters say they will continue to meet to discuss the project and are encouraging corporations and other non-banks to lobby their respective financial institutions in suport of the venture.