Mercore completes the UK’s first ‘digital Bill of Exchange’ transaction, providing finance into the UK SME sector and supporting sugar trade with Nicaragua
London, UK, 20 February 2023 – Mercore, the global trade focused fintech group, today announced that it has executed a trade finance transaction utilising an electronic payment undertaking (ePU) structure (in digital bill of exchange format) working with one of its SME clients, Abercore, a UK based sugar trader and advisory firm.
This pilot transaction by Mercore was for an amount of circa €118k and is the first in a series of ‘digital bills of exchange’ transactions with greater size and frequency. The underlying transaction involved the sourcing of sugar by Abercore from Pantaleon in Nicaragua for onward supply to a UK based food manufacturer.
Mercore completed the financing leveraging the International Trade & Forfaiting Association’s (ITFA) Digital Negotiable Instruments (DNI) Initiative’s digital bill of exchange text and dDOC specification, together with execution via trace:original (Enigio´s solution for digital original documents).
The use of digital payment instruments, such as this ePU, enables parties to execute quicker (typically same-day), at lower costs, and in a more sustainable way compared with traditional paper-based negotiable instruments, which in turn, helps to drive greater financial inclusion. Additionally, with many of the typical paper-based processes having been significantly challenged in recent times (COVID, delivery delays, strikes, etc) electronic execution greatly improves the operational resilience and minimises disruption.
This is one of several digital trades which are, and will be, performed utilising contract law prior to the passing of the Electronic Trade Documents Bill in the UK Parliament and bringing into law the UK’s alternative to UNCITRAL Model Law on Electronic Transferable Records (MLETR).
Anthony Wadsworth-Hill, COO of Mercore said: "Mercore is delighted to execute the UK’s first ‘digital bill of exchange’ transaction and with many further pilot use cases in the pipeline, we hope to support market adoption and get much needed funding into the well-publicised $1.7 trillion+ global trade finance gap. Given this digital approach to trade finance is new, we are extremely grateful to our client, Abercore, for joining us as an early adopter and for promoting the benefits to their customers, enabling us to complete this transaction.
Additionally, we have received great support from a number of participants across the trade finance industry. The collaboration has been superb with notable mentions to ITFA, Sullivan & Worcester UK LLP and the International Chamber of Commerce United Kingdom (ICC UK) for their continued efforts in driving forward standards and reform, Enigio for their innovation on the technology side and Lloyds Bank who shared their learnings and experience from completing the UK’s first ‘digital promissory note’ transaction. We look forward to continued collaboration with our industry partners and supporting existing and new customers with their trade financing requirements going forward."
Luca Galbiati, Director of Abercore said: "It has been a great pleasure to work with Mercore on the first ever ePU ‘digital bill of exchange’ transaction for the sugar industry globally. It is our view that for far too long, sugar trade finance has been overly complicated and slow to adapt. Mercore’s impressive use of new digital technologies to deliver finance will allow us to offer an enhanced level of service to our customer base in Europe and the UK. Importantly, it will allow us to significantly reduce the time it takes to pay sugar producers as well as allowing us to offer delayed payment terms well beyond the point of delivery."
Patrik Zekkar, CEO of Enigio said: "We are impressed to see how Mercore is future-proofing their business by using digital bills of exchange, in the acceleration in transition from paper to digital trade documents. Interoperable digital trade documents will be a game-changer in facilitating global trade on a wider scale. Faster, safer, cost efficient and sustainable, they bring additional functionality without needing to change policy, procedures, or IT systems.
We look forward to working with Mercore, simplifying transactions with digital original documents, and increasing access to finance for SMEs globally. trace:original is ready and compliant under the Electronic Trade Documents Bill, as well as the MLETR, for all types of trade and financial documents."
Sean Edwards, Chair of the International Trade & Forfaiting Association said: "The use of the ITFA ePU by Mercore and their client, Abercore, demonstrates the scalability and commercial value of digital negotiable instruments. Just as importantly, and following the use of ePUs by a major UK high street bank, Mercore have shown their relevance to the SME market and how they can be used to finance UK trade flows now and into the future. As ITFA continues its campaign to open the trade finance market to new investors, I congratulate all involved for their vision and enterprise."
Chris Southworth, Secretary General of the International Chamber of Commerce (United Kingdom) said: "This is a ground breaking development and the beginning of what will become the norm for trade transactions in the future. We are delighted to be supporting this initiative and look forward to seeing more companies benefitting from this cheaper, faster, simpler way of trading."
Gwynne Master, Managing Director, Lending & Working Capital of Lloyds Bank said: "It is fantastic to see the execution of this first "digital bill of exchange" transaction which is another key milestone in the UK's digital trade journey. It was a pleasure for Lloyds Bank to be able to share the knowledge we gained from our UK ePU promissory note transactions and to be part of another digital trade first. We look forward to continued collaboration with Mercore, Enigio, and other interested parties across the whole eco-system in our quest to digitise Trade Finance. These developments will make it easier and quicker to undertake trade going forward, which can only be to the long-term benefit of UK businesses and to global trade more generally. Congratulations to Mercore for completion of this landmark transaction."
Mercore is a non-bank financial institution specialising in the arrangement and provision of trade finance. We are committed to financial inclusion, delivering solutions that ensure trade finance can reach all legitimate business opportunities in a timely manner.
We continually strive to challenge the status quo, with the progressive adoption of proven technological advancements, as evidenced by our membership of ITFA's DNI Initiative and collaboration with Enigio.
Our technology platform has been developed by KYC/AML professionals with a compliance-first approach to banking and finance. As a result, we have market leading capabilities in KYC, AML and financial crime prevention.
This enables us to undertake even those transactions which present more complex KYC/AML risk factors and require specialist knowledge, risk management and controls.
For more information, please visit www.mercore.com or email us at firstname.lastname@example.org
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Abercore has extensive experience and a proven track record of helping sugar producers build B2B sales platforms. Our entrepreneurial and long-term approach allows sugar producers to get ahead of the competition with a strong focus on brand promotion, customer loyalty and innovation.
For more information, please contact email@example.com
Enigio is a tech company offering solutions to ensure consistency, integrity, traceability, and possession of digital information making data available only to those who should have access to it while protecting it from manipulation.
Digitalising original document is at the core of what Enigio does and the trace:original solution can be used not only for digital bills of exchange, but also for other types of documents such as promissory notes, bills of lading, bank guarantees, warehouse receipts, certificates and more.
trace:original provides banks, corporates, logistic providers, and others with all the advantages of original paper documents but none of their shortcomings, without the need for joining a specific ecosystem or closed platform.
The trace:original document can be validated updated, sold, freely transferred and invalidated. It is in a PDF format and can contain attachments, any data standards as well as electronic signatures and electronic seals. It is fully digitally interoperable without the need for API connections. It is safe and secure by design and can be read by both humans and machines.
For more information visit www.enigio.com
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