The world trade volumes have seen a startling increase in open account transactions over the recent years. Today, already more than 80% of the total world trade volume is settled by clean payment. This impressive ratio is expected to grow even more in the future. As a consequence, banks are compelled to offer their corporate clients products that support fully automated processing, as well as cost savings combined with payment assurance and financing options. Bank Payment Obligations (BPO) is the answer.
The Bank Payment Obligation constitutes an irrevocable undertaking of a Bank (usually the bank of the importer) in favour of the bank of the exporter to pay at sight or to pay at maturity. It is subject to the electronic comparison of trade data between the banks via a so-called Transaction Matching Application (TMA) such as, for example, SWIFT-TSU. For the first time, banks are now in a position to offer an enriched payment instrument that meets the demands of their clients in the open account space. BPO benefits include:
Ms. Kati Busse
Trade Product Management
Mr. Davide Sant
Trade Products & Services Italy
Ms. Mihaela Canciu
Global Transaction Banking CEE