The Marco Polo Network claim they are a unique solution which differentiates itself from the traditional destination platforms by being a distributed and open network, see figure below:
- Source & Copyright©2020 – Marco Polo.finance
This brings the following advantages for all of its participants:
- Data privacy, data is stored inside the participants' firewall and shared on a transaction basis with only the parties involved in the transactions, e.g. the Marco Polo participants stay in full control of their data
Marco Polo Payment Commitment solution
Levels of transaction
- Physical: Goods are purchased and shipped to the buyer
- Information: A 3-way-match is performed on the Marco Polo Platform taking into account the following data
- Purchase Order data – Buyer
- Invoice data – Supplier
- Shipment data – Logistic provider
- Financial: Financing is provided by banks upon successful matching of trade data
- Irrevocable Payment Commitment (IPU) of the buyer’s bank in favour of the supplier (under the buyer’s credit line)
b1 Financing of the IPU by buyer’s bank on request of the buyer in favour of the supplier
b2 Financing of the IPU by supplier’s bank on request of the supplier
Source & Copyright©2020 – Marco Polo
Payment Commitment is based open data standards, the distributed Marco Polo Platform and the underlying blockchain technology.
commented: “There is a very strong interest from leading financial institutions and their corporate clients in shifting their Letter of Credit and Bank Payment Obligation (BPO) transactions to Marco Polo's Payment Commitment solution leveraging blockchain technology and increasing the risk mitigation components of open account transaction. I believe that The Payment Commitment solution addresses the needs of the corporates (buyers and sellers) and allows reducing costs and time to transact significantly for banks and corporates while increasing efficiency and data transparency among the trade participants.”
Marco Polo trade platform progress
Currently, the Marco Polo Network has the largest number of financial institutions (over 30) and has been tested and piloted by over 70 corporates and banks all around the globe. The latest corporate users include MAN, Voith, Wolff Group, Pharma Handel GmbH, NMLK, Vesuvius, Daimler, and Dürr.
At the moment banks are hedging their bets with several joining two or more of these platforms not surprisingly as interoperability between the different platforms is currently not guaranteed, e.g. Marco Polo and Contour are inherently interoperable as they both are operating on the Corda Network but they haven’t achieved this yet, while We.trade is on Hyperledger and not compatible at this stage.
CTMfile take: It is clear that the blockchain trade platforms are still in development. Could the IPU be the new trade instrument that takes off, unlike Swift’s BPO? It is definitely a possibility as it is a real challenger to the LC model (lower costs and improved efficiencies), AND it leverages blockchain technology to expand connectivity with additional data and service providers in an open network that is not controlled by one entity. Much to play for.
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