Traditionally, banks have offered to the trading community products that include among others Letters of credits, Factoring, Early Pay or Dynamic Discounting and Asset Based Lending.
Document-intensive letters of credit have indeed proved to be instrumental in the development of international trade finance but it must be recognized that there are a number of problems associated with traditional trade finance, for example the limited connectivity among buyer, supplier and financial institution; limited controls for the supplier and most importantly, the uncertainty of payment.