DRAFT Improving the SMEs Access to Trade Finance
in the OIC Member States
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 PayPal processed $14 billion in mobile payment volume in 2012 – more than 3 times
the mobile payment volume of $4 billion that it processed in 2011.
 PayPal expects to process $20 billion in mobile payment volume in 2013.
Source: PayPal, 2013
2.5. The Bank Payment Obligation
The Bank Payment Obligation is a new instrument of trade finance, positioned precisely
between a traditional documentary letter of credit and an open account transaction. The Bank
Payment Obligation (or BPO) has the advantage of being endorsed by the International
Chamber of Commerce, and of being subject to a widely agreed and unanimously adopted set
of ICC rule called the Uniform Rules for Bank Payment Obligations, or URBPO.
The BPO is a significant innovation at the product and solution level; it represents successful
leveraging of leading-edge technology and involves a significant level of industry education
and of promotion of the new solution to end-clients and other interested parties. The BPO aims
to accelerate and automate transaction processing, and to advance trade financing in
significant ways.
A BPO, in contrast to a documentary letter of credit, operates on the basis of an exchange and
comparison of data elements, instead of a comparison of physical documents against the terms
and conditions stipulated in the documentary credit. An objective, technology-driven process
of data-matching which triggers an agreed payment, is not subject to misunderstanding or
differing interpretation, and in the normal course, should be significantly faster than a manual
document verification process.
Figure 17: Positioning of the Bank Payment Obligation
Source: SWIFT/ICC Industry Education Group on the BPO
In the end, the BPO represents a serious and viable attempt to innovate in the trade finance
space, targeting a proposition that combines attractive features of both documentary letters of
credit, and open account transactions.