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1. Trusted trading partners meet

In this instance, the buyer and seller use a solution powered by IBM Blockchain for Global Trade to find and negotiate with each other. This solution’s interface features a matching engine and marketplace of bank-verified, KYC-enabled, on-boarded trading partners.

To aid negotiations, online templates are available to create and draft trade proposals. Blockchain smart contracts define automated financing offers, logistical partners and payment terms based on certain conditions being met – all without paper.

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2. Initiating a purchase order

With the agreed-upon contract agreed stored on the blockchain, the buyer sends the purchase order with 90-day payment terms. That action – and each after – is agreed upon by the parties and stored on the blockchain as well.

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3. Buyer can request bank payment undertaking and finance terms

Bank payment undertaking is an irrevocable and absolute undertaking by the buyer’s bank to make payment directly to the seller (or the seller’s bank) once settlement conditions in the smart contract are satisfied.

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4. Seller can ask for receivable financing

In order to speed receipt of funds, the seller has the option to ask its bank to provide an invoice financing arrangement for 90 days.

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5. Seller ships order

With trust established between the two parties, the seller ships the order and sends the invoice for goods through the platform. Both parties can track and trace the progress of shipments through the TradeLens solution.

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6. Buyer receives goods

With a click of a button, the buyer confirms receipt. If there are disputes about the goods, the blockchain record provides a means for expedited dispute resolution.

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7. Final settlement

The buyer’s bank debits the buyer’s account and makes payment on the invoice due date to the seller directly (or the bank, if the invoice has been financed).

Buyers and sellers can then rate each other on the transaction, incentivizing cooperation and bringing even more trust to the ecosystem.