The we.trade platform went fully into production in January 2019. In addition to removing the risk associated with trading with unknown partners, creating a “one-stop-shop” of real-time information on any trade visible to all parties and triggering automatic payments through smart contracts, the platform brings a range of further benefits to encourage companies to begin trading internationally.
Key among these is Bank Payment Undertaking (BPU). For selling parties, BPU transfers counterparty risk, already minimized by the nature of the platform, to the banks. This means that if a company fails to pay the money it owes to its trading partner, the banks facilitating the deal will provide interim payment. For buyers, BPU represents an undertaking to provide trade finance, making transactions significantly easier to complete.
we.trade is looking ahead to further development and gaining a broader client base. Currently, most of the users of the platform are financial services companies, the sector that has traditionally shown the most interest in blockchain technology. However, we.trade is also gaining significant interest from logistics and insurance businesses, and will soon seek to onboard companies in these industries.
As the platform grows, IBM Blockchain Services will help with the onboarding of new members. Gaining more participants will grow and diversify we.trade’s revenue streams. An increase in the number and type of businesses using the platform will also create a virtuous circle for the trading companies themselves: the larger the pool of potential partners, the more users can achieve on the same platform. we.trade is effectively building a convenient directory service for trade, where companies can simply search on the platform for an appropriate trading partner, enter discussions and decide to do business.
we.trade could be set to transform the entire trade finance industry. By eliminating or streamlining steps in the trading process — including identifying a reputable partner, sourcing trade finance, ensuring regulatory compliance and chasing up receivables — the company is making cross-border transactions faster, simpler and more transparent. As the platform grows and attracts more banks and corporates to carry out cross-border transactions, more companies, including SMEs, will be empowered to grow their business and diversify their revenue by trading internationally with we.trade.
Cudden concludes: “We continue to make significant achievements with we.trade. We are confident that, working with IBM, we are expanding our offering and simplifying trade not only in Europe, but globally.”