Lloyds and Mercore complete digital trade transactions under ITFA’s DNI Initiative

Lloyds and Mercore Capital have completed a series of transactions under the International Trade and Forfaiting Association’s (ITFA) Digital Negotiable Instrument (DNI) Initiative, highlighting the ease and advantages of digital trade based on shared principles and advanced technology. The documentary collection transactions involved the shipment of sugar from Mercore’s client, an exporter based in the Americas, to Lloyds’ client in the UK. 

Mercore created a draft digital bill of exchange (dBE) on Enigio’s trace:original solution and arranged for it to be drawn by their exporting client. The drawn dBE was transferred via a node-to-node transfer on trace:original to Lloyds, which then arranged for the dBE to be electronically accepted by its importing client. On confirmation of acceptance by Lloyds, Mercore was then able to purchase the dBE from its client, pre-paying them ahead of maturity. 

These transactions are the first under ITFA’s DNI Initiative to involve the node-to-node transfer of a DNI between two separate financial institutions, and the first to involve the handling of a DNI between two financial institutions each facing off to an importer or exporter. Prior DNI transactions have involved only one financial institution interacting with both the importing and exporting party. 

The use of a digital Bill of Exchange allowed for faster execution compared to a paper process, resulting in earlier access to funds for the exporter, supporting their working capital needs.

ITFA’s DNI Initiative aims to fully digitise bills of exchange and promissory notes in cross-border trade by agreeing standards and principles for digital transactions and advocating for new technological and legal frameworks.

 

BIS reports on faster payment system interlinking and APIs

The BIS Committee on Payments and Market Infrastructures (CPMI) has published two reports to the G20 that offer insights and recommendations on the interlinking and interoperability of payment systems to enhance cross-border payments.

Currently, fast payment systems (FPS) are designed and used mainly for domestic retail payments. Interlinking them across different jurisdictions could expand the end user experience of low-cost, fast, easy to access and transparent payments to the cross-border dimension. 

Opportunities to foster cross-border FPS interlinking have grown with the proliferation of FPS globally and with trends towards greater interoperability at the technical level. The growing use of application programming interfaces (APIs) and the adoption of the ISO 20022 financial messaging standard have opened up new possibilities to facilitate payment system interlinking. However, agreeing on workable governance and oversight arrangements is challenging due to the multi-jurisdictional, cross-border and/or cross-currency nature of these arrangements. 

Building on an earlier CPMI report that lays out the benefits and challenges of FPS interlinking and the role of APIs, ‘Linking fast payment systems across borders: governance and oversight’ discusses design choices and the risk implications of these arrangements, sets out the key decisions for governance and outlines recommendations for their oversight. 

The second report promotes the harmonisation of APIs to enhance cross-border payments, noting that APIs are increasingly used throughout the global financial system for various payment functions, enhancing the efficiency of payment data exchange. However, API technical standards are currently fragmented, hindering the potential of APIs in cross-border payments and leading to increased time and expenses, as well as higher risks of errors. 

This report presents ten recommendations directed at a broad array of stakeholders. The recommendations were formulated in collaboration with industry through a CPMI-led panel of experts to promote greater harmonisation of APIs in cross-border payments. The recommendations do not propose a single universal API standard for cross-border payments, nor do they prescribe specific technologies or standards. Rather, they aim to steer API standards in a more harmonised direction by promoting facilitative processes, adoption of best practice design and international data standards, enhancements to the developer experience, and a focus on pre-validation APIs. 

The CPMI said it will continue its engagement with stakeholders to disseminate the findings of the two reports, facilitate their practical implementation and promote the interlinking of FPS for cross-border payments and harmonisation of APIs. 

 

NZ banks to start rolling out Confirmation of Payee in November

New Zealand’s retail banks will start rolling out the new Confirmation of Payee service by the end of November this year, according to the New Zealand Banking Association. It will be a phased delivery to customers to ensure proper testing and customer satisfaction.

Confirmation of Payee is designed to provide bank customers with an extra level of reassurance when making domestic payments from one bank account to another. The service will allow them to check that the account name matches the account number. This will happen before the payment is made.

The new service will notify customers whether the account name and number match real-time bank records. Customers will be provided with a match, partial match or no match notification. Where the payee’s bank does not yet offer the service the payer will receive a ‘cannot check payee details’ notification.

While the new service will help provide some reassurance to customers making domestic payments, banks are reminding customers to remain vigilant. The system will not fully protect them from scams and criminals will continue to look for ways to trick customers into making payments.

Banks participating in the new Confirmation of Payee service are ANZ, ASB, Bank of China, BNZ, CCB, The Co-operative Bank, Heartland Bank, ICBC, Kiwibank, Rabobank, SBS Bank, TSB, and Westpac.

“Banks have been working together at pace to start making the service available before the end of the year,” said Roger Beaumont, chief executive, New Zealand Banking Association. “Due to the size and complexity of payments services the banks offer, some banks are adopting a phased approach to ensure thorough user testing and customer understanding.”

 

European retail investors focus on crude oil amid Middle East tensions

Spectrum Markets’ monthly SERIX data reveals a bullish sentiment towards both major crude oil indices last month, with WTI at 111 and Brent at 108. The SERIX value indicates retail investor sentiment, with a number above 100 marking bullish sentiment and a number below 100 indicating bearish sentiment.

What stands out in September is the steady continuation of the upward trend in crude oil SERIX sentiment that began in June 2024, coinciding with escalating tensions in the Middle East. This trend seems to be driven by geopolitical instability, fuelling market anxiety about supply shortages and associated price increases.

Spectrum saw 36.9% of trades in September 2024 take place outside traditional European market hours, reflecting ongoing demand for 24/5 trading.

“Retail investor sentiment is showing a clear upward trend in line with rising oil prices,” said Michael Hall, Head of Distribution at Spectrum Markets. “Geopolitical instability in the Middle East has undoubtedly played a significant role, fuelling concerns about potential supply disruptions, which have been reflected in the bullish outlook for crude oil.

“The steady rise in SERIX values for both WTI and Brent highlights a shift in sentiment, as investors look to oil as a key asset amid broader market uncertainties,” Hall added. “With the energy market continuing to experience volatility, we expect this interest in crude oil to persist.”

 

Ripple announces stablecoin exchange partners for global distribution

Ripple, a provider of digital asset infrastructure for financial institutions, announced its exchange partners and customers for Ripple USD (RLUSD), an enterprise-grade, USD-denominated stablecoin. Through strategic partnerships, RLUSD will be available globally for institutions and users on global exchanges and platforms, including Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish.

RLUSD aims to combine the stability of traditional fiat currencies with the efficiency of blockchain technology, making it ideal for financial use cases. In a statement, Ripple highlighted that RLUSD enables real-time, 24/7 global payments; provides a stable, reliable bridge between traditional fiat currencies and the crypto ecosystem; and provides liquidity, settlement, and collateralisation for trading real-world assets such as commodities, securities, and treasuries on-chain.

RLUSD is one of the few stablecoins issued under a New York Trust Company Charter, ensuring rigorous oversight and regulation. Ripple has assembled an advisory board that includes former Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair, Vice Chairman of Partners Capital and former CENTRE Consortium CEO David Puth, and Ripple co-founder and Executive Chairman Chris Larsen, to guide the responsible introduction of RLUSD to the market.

“Stablecoins will play a key role in modernising our financial infrastructure and broadening financial inclusion,” said Sheila Bair, former FDIC Chair. “As the digital assets industry grows, responsible innovation will be paramount to their adoption, prioritising both consumer protection and financial stability.”

 

Nordic organisations investing more in cybersecurity

More than half (54%) of the respondents to a Tietoevry survey across Finland, Norway and Sweden report that their organisation has experienced at least one cyberattack in the past year that caused serious disruption. Nearly nine out of ten (87%) anticipate the number of attacks to further increase in the coming years, yet only 32% feel very confident in their organisation’s ability to detect and respond to incidents.

“While cyberattacks are seen to be increasing, only half of respondents signify their organisation to have a clear plan for how to handle them,” commented Sigrun Hansen Bock, Head of Cybersecurity Services at Tietoevry Tech Services. “Organisations that have faced cybersecurity attacks are understandably feeling most prepared for future threats and have confidence in their ability to detect them.”

Around three-quarters (74%) of respondents said their organisations have integrated cybersecurity into strategic planning, while 75% responded that they have increased their investment in cybersecurity compared to a year ago. The significant increase in cyber threats during the last years and the societal consequences of cyberattacks are evident, yet only 60% of respondents report collaborating with other organisations to strengthen their cybersecurity efforts.

“While cyber threats pose significant challenges to society, through the survey we can pick good trends, for example in the increase of general awareness and cybersecurity investments,” added Hansen Bock. “To make the most of these encouraging developments for the good of every level in society, cross-organisational collaboration is clearly calling for focus. Only 30% of respondents are collaborating with other organisations and officials in incident management and 30% say they are sharing information through networks and forums.”

 

Token.io partners with Santander to steer future of open banking payments

Token.io, an account-to-account (A2A) payment infrastructure provider, has announced a partnership with Santander UK that aims to leverage the former’s open banking connectivity and infrastructure to enhance the bank’s customer experiences and develop real-time payment propositions. 

Initially, Santander will leverage Token.io’s infrastructure to offer payment directly from an external bank account as a credit card repayment option. With direct account-to-account (A2A) payment for card repayments, the bank’s customers should have a more seamless payment experience than direct debit or manual bank transfers, as the solution eliminates error-prone manual data entry and supports biometric strong customer authentication (SCA) for payments made on mobile devices.

In addition, Santander plans to utilise Token.io’s infrastructure to modernise real-time money movement for its retail banking clients.