Trade Finance Gets Boost Via Banks, APIs

Application program interfaces (APIs) are helping to speed Open Banking — and, by extension, bringing trade finance into the digital age. To that end, HSBC said last week that it is deploying an API designed to promote bank collaboration, with a focus on trade finance.

The API, according to reports, will allow HSBC partner banks to issue local guarantees across markets — and where those banks do not have an operating presence. HSBC said the local guarantees can be managed within the partner banks’ own platforms. The guarantees mean that B2B suppliers will be guaranteed payment, even if end customers do not pay. The API will enable the HSBC partner banks to reissue the guarantees if the partner banks do not operate within a certain market, but the aforementioned suppliers do.

“For example, an Italian-based customer [that] needs to do a project in the Middle East has to issue local guarantees in the Middle East, but it can’t open accounts with another bank in the region just for that purpose, as it is extremely costly and cumbersome,” explained HSBC’s Surath Sengupta, managing director and global head of portfolio management, asset distribution and trade finance, the report noted. “…HSBC can issue the guarantee, which [the customer] can see. But they still have the relationship with their local bank, which also has a tie-up with HSBC. So, they don’t have to navigate different banks for every project.”

The announcement follows other APIs on offer from HSBC geared toward Open Banking.

BitPay And XRP

This week, according to a release, BitPay, a blockchain payments provider, said it is linking with Ripple’s developer initiative, Xpring, in a bid to enable merchants to accept XRP for payments through BitPay’s merchant processing and cross-border payments platform. The service is slated to go live by the end of the year. In terms of mechanics, and according to the release, BitPay Wallet and BitPay Prepaid Cardholders can also store and spend XRP through BitPay merchants and businesses.

“BitPay customers are leveraging the promise of blockchain payment technology — and, with XRP, can offer a payment option that is fast, cost-effective and scalable,” said Sean Rolland, director of product at BitPay, in the announcement. “The addition of XRP as the next blockchain asset supported by BitPay expands blockchain choices across the payments space.”

Beyond those company-specific announcements, The Moscow Times reported that eight foreign banks have signed on to what is billed as the “Russian version” of the SWIFT payments messaging service.

The System for the Transfer of Financial Messages (SPFS), according to the publication, “was launched in December 2017 as a response to fears that Russia could be cut off from SWIFT, the system that allows for bank-to-bank transfers around the world.”

Now, in the latest announcement, with several hundred users already in place, Alla Bakina, leader for the development and rollout of the system for the Central Bank said, per the publication: “We have provided the opportunity for foreign banks and legal entities to connect to SPFS. Today, the system has around 400 users, including eight foreign entities.”

Of the eight entities (described as foreign banks), three are already using the system, and five are waiting. The banks were not named explicitly by SPFS, but the site said that two include the Belarussian subsidiary of Gazprombank and the Eurasian Bank of Kazakhstan.