Alfa-Bank and Novolipetsk Steel Company (NLMK), in cooperation with Commerzbank and Vesuvius from Germany, have launched a pilot project of cross-border payments via the Marco Polo international trade finance network. For Marco Polo, it is the first Russian-German import-export operations financing project.
The pilot project objectives are to build a digital end-to-end trade finance and supply chain finance solution on a blockchain platform. Marco Polo offers to the network members a set of application programming interfaces (APIs) for direct interaction with ERP systems, allowing international trade participants to make payments, create irrevocable payment obligations and discount accounts receivable within a unified transparent system of interaction with partners.
“We launched our first distributed ledger technology in trade finance as early as 2017," said Dina Merkulova, head of Trade Finance at Alfa-Bank. "Since then, corporate blockchain solutions have been considerably elaborated, and earned our clients’ confidence and proved their applicability to real business processes. Projects such as Marco Polo create added value for clients ensuring more international trade transparency and manageability thanks to integrated bank payment, finance and discount instruments.”
Current corporate purchase and supply processes are cumbersome due to the execution and exchange of multiple paper documents, while banking instruments are not integrated into clients’ business processes. The Marco Polo network based on R3 Corda allows Alfa-Bank to offer its clients a wide range of international trade finance solutions and seamless integration into the global trade ecosystem.
“Our decision to take part in the pilot project was prompted by our intention to optimise the process of interaction with partners based on blockchain technology," said NLMK director for Treasury, Anna Sokolova. "We expect Marco Polo to ensure seamless collaboration of several sides engaged in international trade operations (banks, suppliers, insurance companies, etc.) with a flexible access to working capital financing instruments to the parties."
“Our international corporates show continuous interest in piloting the Marco Polo Payment Commitment together with us and banks of our global network, like Alfa-Bank," commented Enno-Burghard Weitzel, Commerzbank’s global head of Trade Finance Products. "This new instrument, which is provided upon digital processing and matching of trade data in the Marco Polo network, meets our customers’ growing demand for increased speed of transaction and transparency, optimised financing, enhanced working capital management and possible integration of ERP systems.”
“Integrated working capital solutions directly related to the contract, issued invoices and shipping documents definitely benefit all the parties, and our experience with Marco Polo demonstrates that core processes can really be streamlined," added Christian Greving, Cash Coordinator Treasury at Vesuvius.
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