Modernising global trade finance practices

André Casterman

Journal of Payments Strategy & Systems, 2012, vol. 6, issue 3, 225-231

Abstract: The partnership between the ICC and SWIFT will revolutionise global trade finance practices by establishing paperless inter-bank practices and by leveraging electronic transaction data available from dematerialised business-to-business processes. As annualised trade growth is expected to accelerate after 2015, the need for modern trade finance practices based on electronic data flows becomes unquestionable. There has never been an equivalent instrument to enable an exporter to trade on open account terms with the same degree of confidence as a payment that will be executed in accordance with the terms of a letter of credit. Both the ICC and SWIFT believe that, by working together and leveraging their respective positions in the trade finance community, the Bank Payment Obligation rules (BPO) will have an important role to play in supporting the development of international trade in the 21st century and in addressing cost pressures in the face of increased automation and changes in the regulatory environment. The time has now come for banks to prepare for this innovation and start extending their supply-chain finance services from invoice-based processing services (eg e-invoicing, factoring and reverse factoring) to BPO-based services such as payment assurance, pre-shipment and post-shipment finance.

Keywords: payments; trade finance; ICC; supply-chain finance; bank payment obligation; ISO20022 (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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