Category Archives: Letters of Credit

China Causing Banks Trade Finance Shops Nightmares

As commodity prices increase in volatility, banks are getting much more involved in technical cases where buyers in China using Letters of Credit use the […]

Is the Letter of Credit Waning?

e-invoicing

Where is the letter of credit today? Different sources of data suggest that trading activities involving the letter of credit are alive and well, despite a trend to open account trade. But others suggest both anecdotally and from third-party research that the L/C is on the wane. There’s probably some truth to both sides of the argument, depending on how one defines the question. For example, are we counting absolute number of transactions, overall volume, new buyers or sellers, different or specific geographies or something else? Still, a Barclays banker makes a great case in this TFX News article that L/C use is declining as non-recourse receivables finance growth accelerates. As he observes with open account trade, there has been a “dramatic shift from traditional trade instruments, such as import L/Cs, advanced payments or collections to open account terms with counterparties in recent years with close to 90% of all global trade transactions now being on an open account basis.”

The Rise (and Rise) of Supplier Networks: The Comet Coming?

Trade Financing Matters - Free White Paper Download
The world of trade finance has traditionally been served by the documentary letter of credit for hundreds of years. The associated management of risk and financing services has hitherto been the exclusive domain of the financial services industry, comprising both banks and to some extent specialist non-bank financial institutions. As we enter 2015, it is increasingly clear that as in other areas of financial services, the business of trade finance is exposed to the competitive threat of non-traditional service providers, including those in the financial technology sector who are well positioned to take advantage of new supply chain logistics and other trade-related platforms through the provision of new products and services underpinned by new business models. Find out what the future has in store with this free, new downloadable piece of research from Trade Financing Matters.

International Payables – Where the headaches begin

Globalization has resulted in dramatic growth in trade flows. While governments like to focus on exports, many companies source both finished goods and raw materials […]

SWIFT’s Bank Payment Obligation continues to struggle

Andre Casterman, Global Head Corporate and Supply Chain Markets for SWIFT, was kind enough to share some transaction volumes with me regarding SWIFT’s Bank Payment […]

SWIFTs Marathon to make the Bank Payment Obligation a success

For the last several years, SWIFT has been working with the International Chamber of Commerce (ICC) on a product to enable banks to handle some […]

CFP International provides an easier way for Small Business Importers to issue Letters of Credit

Let’s face it, no one likes to use a Letter of Credit – we’ve covered this in a series of posts. See the four part […]

The slow extinction of paper based tools for trade finance

There’s been a lot of talk about the documents to support global trade and the underlying finance driven by these documents.  Letters of credit are […]

UPS Capital and Finance – closed loop and focused on SMEs

I recently heard Ron Chang, new head of UPS Capital, speak about what their three main areas are in regards to supply chain finance.  Few […]

Trade Credit versus Trade Finance – Is there a difference?

This is a confusing area and unfortunately many in the industry use these terms interchangeably.  As the Bank for International Settlements describes in their paper […]

You Want a Letter of Credit, Really? Part 4

How do L/C Confirmations facilitate Trade Credit…   Many corporations adopt a policy that all export letters of credit ("L/Cs") received must be confirmed by […]

You want a Letter of Credit, Really? Part 3

As we continue this series on Letters of Credit, certainly an arcane and boring subject for most of us, bear in mind that today the […]