In the realm of international trade, exciting progress has often been stymied by complex and inefficient payment mechanisms. Recent years have seen a surge in the volume of global trade, with the World Trade Organization (WTO) reporting a significant increase in merchandise trade volume. While extremely encouraging for businesses operating internationally, this growth has magnified the challenges inherent in trade finance, particularly in the realm of payment settlements.

The current landscape for trade payments is fraught with delays, high costs, and risks, primarily due to a reliance on legacy systems and paper-based processes. For instance, letters of credit (LCs) have been used for generations to protect international buyers and sellers against factors such as distance or differing laws. But, in many cases, they are still printed on paper and processed manually, slowing things down. Plus, the banking process for individual organizations is usually managed through each bank's proprietary system, with data coming from multiple sources—potentially creating additional delays. Amidst these dynamics and a shifting economic landscape, the Asian Development Bank reported that the global trade finance gap grew to a record $2.5 trillion in 2022.

The good news is that numerous industry initiatives are already seeking solutions to digitize the payments and documentation required to facilitate global trade. For example, some banks and fintech companies have recognized that the adoption of electronic bills of lading (eBL)—replacing traditional paper—has the potential to speed up the transfer of documents and reduce associated fraud.