The data transfer for transactions between engineering technology company Voith and pump and valve manufacturer KSB SE were carried out digitally through R3 Corda Platform.
These transactions were notable since the necessary data was exchanged through distributed ledger technology (DLT), ditching the usual slow and costly physical documents and intermediaries, according to a press release from the consortium behind the blockchain.
The companies agreed on the order and delivery details through the Marco Polo network, and after the goods were delivered, the shipment information was entered into the system and “automatically matched with previously agreed data, triggering an irrevocable payment obligation on the part of the buyer’s bank,” the release said.
Along with R3, the primary technology provider is Irish startup TradeIX founded by CEO Robert Barnes who previously co-founded PrimeRevenue. TradeIX isn’t merely a partner. It also built and licenses the “Marco Polo Platform” which forms a large part of the application software used on the Marco Polo network and customizable by each bank. That has the advantage of not requiring too steep an initial investment from banks.
Last year TradeIX raised a $16 million Series A round, led by ING Ventures and including investment from BNP Paribas. Both banks are members of Marco Polo as well as the komgo and Voltron trade finance networks.
DLT Will Make Transactions Faster, Easier and More Secure
Nikolaus Giesbert, a divisional board member for trade finance and cash management at Commerzbank, which has also tested DLT in capital markets said:
“The transaction proves that blockchain technology offers our clients a payment undertaking and state-of-the-art financing for trade transactions with both foreign countries and domestically.”
Christian Ricken, a member of LBBW’s board of managing directors and head of its capital market business and asset management/international business, said:
“DLT in trade finance will make transactions faster, easier and more secure. Not only are we breaking new ground in terms of technology, but also in the cooperation between banks and businesses.”
Future tests will involve ERP integration with customer systems, so the data is pulled directly from their back office functions. There are also plans for integration with transport and insurance providers.
Gerald Böhm, head of Guarantees and Trade Finance at Voith explained:
“The cooperation with LBBW and Commerzbank offers us an opportunity to actively shape and incorporate the company’s perspective into the further development of the products on offer (here the payment commitment).”
Taking SWIFT by Storm
In January we wrote of how SWIFT, the global banking payments network, plans to start testing its GPI Link payments standard via R3’s Corda platform. SWIFT CEO Gottfried Leibbrandt then said that the integration is currently a proof-of-concept. The integration will let enterprise blockchain software firm R3 link to GPI (Global Payments Innovation) payments from their platform.
Also, one more bank recently started working with Corda. In January, as a part of the five-year agreement, ING Bank said they were set to acquire an unlimited number of licenses for R3’s Corda Enterprise platform. The banking giant said they are planning to implement Corda’s decentralized applications (CorDapps) across its global business infrastructure.
CorDapps is a set of blockchain-based pieces of technology that can be used in trade finance, identity, insurance and capital markets.
Marco Polo’s go-to-market focus on large enterprises contrasts with the other open account blockchain network we.trade which is initially targeting SMEs. The Marco Polo platform is also capable of supporting SMEs which is part of the post-launch plan.