Launch of Cross-Border Commodities Financial Services Platform will be powered by Mastercard as the global network and payment technology provider
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Singapore, 12 October 2016 – Mastercard today announces an inaugural strategic partnership in the Shanghai Free Trade Zone (SFTZ) where Mastercard will be the global network and payment technology provider for a revolutionary commodities trading platform. The Cross-Border Commodities Financial Services Platform is a pioneering effort by COMMIN, ValuePay and Mastercard, supported by Mastercard’s key banking partners including DBS Bank, CIMB Bank and Bank of Shanghai, who have expressed interest in participating in the pilot test of the platform.
An exclusive first for Mastercard, this partnership was announced at the signing of a Memorandum of Understanding (MoU) between all parties. In the process of conceptualizing and developing the platform, Mastercard was instrumental in bringing about the digitization of payments in the platform, driving efficiencies and transparency for all parties using the platform.
The Cross-Border Commodities Financial Services Platform is a revolutionary eco-system and model, pioneered and tested at the SFTZ, with a view to scale the platform globally. Some of the key benefits of this platform include:
- Greater transparency and accountability – With a fully digital platform from payments to documentation, the Cross-Border Commodities Financial Services Platform is designed to bring greater transparency and accountability to the trade process. It provides authorities and stakeholders with deep and detailed visibility of the full trade cycle, including the payment of duties and subsequent transactions
- Enhanced efficiencies and savings – The platform is designed to bring about significant savings in terms of time and cost to all parties involved in the eco-system. In contrast with the existing system which involves heavy administration and is very labor-intensive, the new platform will enable an efficient and convenient trading environment for all parties
- Deeper connectivity and security – The platform will also bring about deeper connectivity and a higher security for the various parties and stakeholders in the SFTZ. This in turn will enhance collaboration and coordination within the SFTZ, connecting banks, regulatory bodies, bonded warehouses, merchants and businesses through one platform
The platform will also serve as a means to authenticate the credibility of merchants and traders, opening up opportunities for more banks around the world to be a part of SFTZ’s trade financing and encouraging an increased volume of cross-border transactions.
Mastercard sees the Cross-Border Commodities Financial Services Platform as an opportunity to bring its global network together with innovative digital payment technology to create a solution that replaces the previous system, which was burdened by significant administrative and costly processes. Through the platform, Mastercard hopes this will be the model for future global trade hubs, paving the way towards a world without cash.
Wang Lei, General Manager, COMMIN said, “The availability of an electronic and digital warehouse receipt system is one of the most important foundations for commodity trade financing. The establishment of the Cross-Border Commodities Financial Services Platform in partnership with ValuePay, Mastercard and key banking partners is a significant milestone for the Shanghai Free Trade Zone in building a safer and more secure transaction environment for all parties in the Shanghai Free Trade Zone. We hope the added value services offered by the platform will enable better logistic tracking system and financial services that further promote cross-border transactions and collaborations between the various parties, for greater economic growth.”
Kevin Li, President, ValuePay said, “Value Pay is delighted to partner Mastercard and the local and international banks to work together with the Shanghai Free Trade Zone and COMMIN to develop an online, transparent and efficient platform for all B2B transactions within the Shanghai Free Trade Zone. Cross-Border Commodities Financial Services Platform is an integrated platform that provides real-time resolution of key issues such as supervision and distribution of pledged goods as well as the authentication of applications and processes. This helps brings about greater efficiency and safety and security compared to the traditional system which is labor and administration intensive.”
Lim Him Chuan, Group Head of Product Management, Global Transaction Services, DBS Bank said, “China is an important trade corridor for Singapore and our key Asian markets. As one of the first financial institutions operating in the Shanghai Free Trade Zone, we are keen to explore more efficient ways to help facilitate our customers’ trade with China.”
“Trade settlement has traditionally been a paper-intensive industry for both banks and customers. With this first-of-its-kind platform, it is now possible for manual processes to be digitised and streamlined, offering our customers greater convenience and efficiency. DBS is very pleased to have the opportunity to take part in the pilot test of this innovative digital initiative to make banking simpler and faster for our customers.”
Thomas Tan, Senior Managing Director, Global Wholesale Banking, CIMB Group said, “CIMB, in collaboration with Mastercard, is pleased to be a key enabler in facilitating Malaysian traders’ cross-border B2B digital trade payments and settlements with the Shanghai Free Trade Zone (SFTZ) under its new integrated online platform. Malaysian traders will benefit from a seamless transactional flow with SFTZ, in the form of greater efficiency, cost-effectiveness, transparency and control to enhance cash flow management. Riding on CIMB’s Corporate Card Solutions, the B2B digital trade payments and settlements solution leverages on cutting-edge technology of virtual card number (VCN) capability, which is a key highlight of CIMB’s Cash Management’s suite of digital products. With the B2B digital solution’s numerous benefits, we certainly look forward to extending it to the rest of our counterparties in ASEAN.”
Qian Yaping, President, Bank of Shanghai, Pilot FTZ Branch, said, “The Bank of Shanghai has always had an invested interest in the Shanghai Free Trade Zone (SFTZ), with our head office located in the SFTZ itself. We are excited to be a part of the Cross-Border Commodities Financial Services Platform, in partnership with COMMIN, Value Pay and Mastercard, to bring about a revolutionary system that will not only support the growth of the SFTZ, but will bring innovative technology that benefits all parties. The Bank of Shanghai has always looked towards bringing innovative financial products and services to our customers and stakeholders, we believe that with this new platform, we are able to not only promote cross-border payments, but bring about enhanced safety and security with electronic documentation, spurring greater economic development.”
Yvette Oh, Executive Vice President, Market Development, Asia Pacific, Mastercard, said, “With the huge increase of inter-regional trade, the Shanghai Free Trade Zone has become a critical trade hub not only for China but for the region. In understanding the challenges of developing a world class trade hub, Mastercard saw an opportunity to bring together its network and innovative digital payment technology to work hand in hand with our partners to bring about the revolutionary Cross-Border Commodities Financial Services Platform. With the new platform, whether it is governments, banks, merchants or businesses, they will not only experience enhanced connectivity and efficiency but are able to save tremendously on time and costs compared to the old administrative, paper intensive process. We estimate that with the Cross-Border Commodities Financial Services Platform, we are creating significant time savings in the trade processes within the Shanghai Free Trade Zone; that translates to savings in actual operational costs. We believe that this will revolutionize the model of trade hubs to come, as we unlock the power of innovative payment technology to bring about a world beyond cash.”
Mastercard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardAP and @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.
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