Finding a secure environment to trade The we.trade platform is one area that may be able to help as it offers companies a chance to keep their trade processes running as smoothly as possible. As all companies signed up to we.trade are pre-approved customers of one of the consortium of we.trade member banks, a secure and trusted environment for managing trade has been established. Patrik Zekkar says: “We.trade is a good example of a structure that makes trading safer for various reasons. A very important factor is that you have full traceability of the trade and trackability which means you always know where your goods are. You are able to mitigate your risks and also keep an ear firmly to the ground by having banks on both sides of the trade validating the daily status and condition of your counterparty.” We.trade allows companies to use their working capital at a significantly lower risk and gives them access to cash that would otherwise be tied up during the buying and selling of goods and services. Buyers are able to avoid making a pre-payment for deliveries by instructing their bank to issue a conditional payment guarantee. Sellers can extend payment terms with no negative liquidity implications as their bank can discount the receivable in relation only to the risk of the buyer’s bank, thereby removing the need to introduce credit limits for the seller. Carry on trading Patrik Zekkar continues: “Importantly, we.trade provides companies with a regulatory framework for trading which ensures that they receive legal protection. On top of that, we.trade enables payments or deliveries to be made conditionally. This means that you have the possibility to secure that you have fulfilled your obligation and therefore should be paid. Or in the same way, that you have not received the goods unloaded from the truck, for example, and therefore you shouldn’t pay. So there’s also that traceability for securing payment obligations.” In potentially restricted markets, we.trade enables trade to take place that might not have been possible due to uncertainty and complexity, thereby helping to keep economies moving. The platform allows companies to reduce their credit risk by using payment guarantees instead of increasing overdraft facilities and by supporting short-term and self-liquidating transactions in the ‘real economy’. Patrik Zekkar concludes: “Assessing how the COVID-19 outbreak will affect trade in the future, it is easy to predict a strengthening of supply chain contingency planning and a move towards platforms and structures that make trading more robust. This naturally leads towards fully digital, paperless and automated platforms like we trade. Improving the security in your trade, as well as the visibility and transparency will undoubtedly help in these changing times.”
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