Recent estimates suggest that more than 80% of global trade is now conducted on open account. Widespread migration to open account, driven by changes in business practice and developments in information technology, in particular the advent of the Internet, has fundamentally altered the risk dynamic of international trade, whilst forcing the development of new solutions in process efficiency, liquidity management and supply chain financing.
SWIFT has responded to the move towards open account with the development and deployment of the Trade Services Utility (TSU). The TSU is a centralised matching and workflow engine providing timely and accurate comparison of data taken from underlying corporate purchase agreements and related documents, such as commercial invoices, transport and insurance.
In addition, the TSU now supports the exchange of a “Bank Payment Obligation” (BPO), an irrevocable conditional obligation from one bank to pay another bank, subject to the presentation of compliant data in the TSU. The “Notice of Intent to Pay” message is an additional information message indicating one corporate’s intent to pay another corporate. Together, these two features provide a strong backbone for banks to offer alternative forms of financing, including pre-shipment, post-shipment and reverse factoring.
Under the SWIFT Partner Management Programme, SWIFT qualifies third party financial applications that properly complement SWIFT's value proposition. For further details visit: SWIFTReady TSU applications. These certified application vendors can now offer comprehensive software solutions to those banks ready to integrate the TSU into their back office processes. Similar capabilities are available from some members of the TSU user bank community on a white label basis. For further details on this please contact SWIFT.