Recent development in Payment method

 

1.      BPO: Bank payment obligation (BPO)

2.      eUCP Version 2.0

3.      eURC Version 1.0

4.      (URDTT) Version 1.0

5.      Consignment Sale

6.      Blockchain

7.      Factoring

8.      E-commerce:

A brief overview of the above method:

1. BPO:

Bank payment obligation (BPO) is a class of settlement solution in international supply chain finance. The solution is championed by SWIFT and the International Chamber of Commerce (ICC) Banking Commission as a means to move away from letter of credit schemes. Bankers, traders, lawyers and all trade practitioners who deal with BPO will refer to these rules on a daily basis.

A BPO is an irrevocable document given from a buyer’s bank to a supplier or seller’s bank, where an agreement is made to pay a specified amount of money on an agreed future date under the condition of electronic matching of data.

BPO benefits include:

1. Mitigating risks in international trade for buyers and sellers alike Speed, reliability, convenience
2. Reduced costs and improved accuracy
3. Enhanced risk management
4. Assurance of payment
5. Access to flexible financing
6. Securing the supply chain

 2. eUCP Version 2.0

The latest version, 2.0, is known as 'Uniform Customs and Practice for Documentary Credits (UCP 600) Supplement for Electronic Presentations ("eUCP")'. On 6 June 2017, the ICC Banking Commission launched a Digitalisation Working Group to anticipate and accompany the digitalisation of trade finance.

eUCP v2.0 highlights:

 1.        The eUCPv2.0 supplements UCP 600 to accommodate (digital) presentation.

2.        The eUCP shall apply where the credit indicates that it is subject to the eUCP

3.        Document shall include an electronic record.

4.        Place for presentation . . . means an electronic address . . .

5.        Sign and the like shall include an electronic signature.

6.        May be presented in any format, unless specified by the credit instrument.

7.        A presentation requires a Notice of Completeness (new document).

8.        Any requirement for presentation of one or more originals or copies of an electronic record is satisfied by the presentation of one electronic record.

 3. eURC Version 1.0

 

 The International Chamber of Commerce Uniform Rules for Collections (URC 522) Supplement for Electronic Presentation (eURC v1.0). in effect 1 July 2019.

 eURC v1.0 highlights:

 

1.        The eURC supplements ICC Publication URC 522 in order to accommodate presentation of electronic records alone or in combination with paper documents.

2.        The eURC shall apply where the collection instruction indicates that it is subject to the eURC collection.

3.        Document shall include an electronic record.

4.        Place for presentation means an electronic address.

5.        Sign and the like shall include an electronic signature.

6.        May be presented in any format, unless specified by the collection instruction.

 4. URDTT Version 1.0

“The ICC Uniform Rules for Digital Trade Transactions (URDTT) published on October 1, 2021

 are intended:

• for a fully digital environment
• to be neutral with regard to technology and messaging standards
• to extend into the corporate space, including commercial transactions and the growing community of non-bank providers of financial services.

 The rules will serve as an overarching framework for Digital Trade Transactions thereby providing global standardization, consistency and conformity, providing a collective understanding of terms and definitions, whilst promoting and supporting the usage of electronic records/documents/data.

 5. Consignment Sale:

 Consignment sale is an arrangement in which goods are left with a third party to sell. The party that sells the goods on consignment receives a portion of the profits, either as a flat rate fee or commission. Selling via a consignment arrangement can be a low-commission, low-time-investment way of selling items or services.

 6. Blockchain:

 Blockchain payment systems are used to facilitate, process, and verify transactions made on a blockchain or distributed ledger system. These tools may be designed for individuals, businesses, or financial institutions, and will have a few differing features depending on the use case. Across all uses, blockchain payment solutions allow customers to quickly and securely make transactions on a blockchain.

 Companies choose to use blockchain payment solutions for a number of reasons. Some tools enable the creation of smart contracts, or protocols used to facilitate, verify, and enforce transactions. These contracts are well documented and provide a higher level of traceability. These forms of payment are also quicker than traditional tools since they do not require a financial institution and transactions can be completed across country borders with ease.

 7. Factoring:

 Factoring is a financial transaction in which a company sells its receivables to a financial company (called a factor). The factor collects payment on the receivables from the company's customers. Factoring allows companies to immediately build up their cash balance and pay any outstanding obligations.

Factor Chain International (FCI) is the Global Representative Body for Factoring and Financing of Open Account Domestic and International Trade Receivables.

 8. E-commerce:

E-commerce is the buying and selling of good or services via the internet, and the transfer of money and data to complete the sales. It's also known as electronic commerce or internet commerce.

There are three main types of e-commerce: business-to-business (websites such as Shopify), business-to-consumer (websites such as Amazon), and consumer-to-consumer (websites such as eBay).