🌟 Editor's note

Welcome to our first newsletter! We’re one week into the launch of Trade Treasury Payments, and it’s been a busy one. With so much going on in the world of liquidity and cash management, we’ve tried to simplify the top stories, highlights and important notes in this short digest.

Happy reading, and have a wonderful week, from the TTP headquarters, in Brick Lane, London.

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Slow read

Is it possible to engage in the commodity trade finance market without getting your backside bitten off by the sharp-toothed beasts that lurk therein? John MacNamara examines the case for re-entering the apparently bloody waters of commodity trade finance. 

The 1975 film “Jaws” scared the bejeebers out of everyone and was credited with prompting a dramatic loss of interest in ocean swimming off East Coast USA. Three years later, “Jaws 2” was marketed under the tagline “Just when you thought it was safe to go back in the water…”. Eventually of course we all did go back in, yet we all knew the man-eating Great White Sharks were all still out there. How does this work? Perhaps for starters might be to ask, how many people do you actually know who’ve been eaten by a shark? Yes it does happen, occasionally, but not on a daily basis and you need to be pretty unlucky.  So,  does Commodity Trade Finance (CTF) work the same way?   

Let’s start with the CTF positives. The big one is scale. For the average bank, the ‘New Client Adoption’ process for onboarding and keeping a corporate client is massively burdensome, and consequently commensurately costly. The familiar ‘KYC’ increasingly becomes ‘KYCC’ – Know your Customer’s Customer. This is not just for the assessment of Financial Crime risks, including Anti Money Laundering (AML), Countering the Financing of Terrorism (CFT), and compliance with sanctions, but also now looking at sustainability concepts like ‘Scope 3 emissions’, all before anyone even mentions ‘credit risk’. Then physically transacting say a documentary Letter of Credit (LC), is exactly the same amount of work for a container full of manufactured widgets worth $7,000 as for a commodity cargo of crude worth $70 million. CTF offers economies of scale. Relatively small teams in the lender’s office can process exponentially high volumes of trade, on which their fee percentage is based because the cargo unit size is so chunky. 

Then there’s the incremental cross-sell business:  add on further revenue from taking third-party credit risk (for example in confirming the LC of your customer’s buyer’s bank, or offering pre/post shipment finance), or FX, or interest rate management or commodity price hedging products, and it all adds up. On top, the actual incidence of default across the whole trade finance market is on average low. The ICC’s trade register, which collects data from 22 of the largest trade finance banks, across trillions of dollars’ worth of transactions, puts it at less than 0.2%, and has done for years.  The CTF lender can make big money pretty quickly.  So what’s not to like? Well unfortunately the challenge is that, with these big ticket sizes, if one customer does go South, you can also lose big money, and that can also happen pretty quickly. 

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Trade digest

Treasury digest

Payments digest

🗓️ Upcoming events

Multimedia from Trade Treasury Payments

Podcasts

🚀 Our latest edition

In a world marked by fragmentation, shifting alliances, and systemic uncertainty, the inaugural edition of Trade Treasury Payments (TTP) explores the evolving foundations of global trade, liquidity, and risk management. This issue reflects on the past decade — from the rise and fall of supply chain finance (SCF), trade credit insurance, and the transformation of the corporate treasury function — while confronting today’s challenges across digitalisation, regulation, and protectionism.

We examine how the payment landscape has evolved, the role of real-time treasury data, and the emergence of deep-tier supply chain finance (DTSCF), where financing extends beyond tier-one suppliers. Key contributions also address the increasing use of artificial intelligence (AI) in treasury operations, the rise of ESG-linked (Environmental, Social and Governance) finance, and how policy shifts — such as US tariff strategies and regulatory divergence — are impacting liquidity and access to capital.

We explore regional diversification efforts, including the African Continental Free Trade Area (AfCFTA), and analyse growing South-South trade flows from markets such as the Gulf Cooperation Council (GCC), India, and China.

With insights from industry leaders at BAFT (Bankers Association for Finance and Trade), ICISA (International Credit Insurance & Surety Association), and ICC (International Chamber of Commerce), this edition connects high-level trends with practical implications for banks, insurers, corporates, and policymakers.

Every business stands to benefit — so thank you in advance for your engagement.

🦄 Company spotlight

ETR Digital — Bringing trade finance into the digital age

A startup to watch, ETR Digital is transforming traditional trade documents like promissory notes and bills of exchange into fully digital, secure, and digital negotiable instruments.

The backstory: Founded by trade finance veterans from BNY Mellon, Arqit, and Lloyds, the team brings deep industry and legal expertise to modernise financial workflows.

Key innovation: A compliant, encrypted platform that replaces paper with digital negotiable instruments — cutting costs, speeding up transactions, and unlocking working capital.

Traction: Gaining momentum across Europe and the Gulf, and partnering with firms like Calculum to offer data-driven payment insights.

🏆 Reader of the week

Did You Know? Trade credit insurance is now the second most used method for banks to mitigate risk globally—up from near invisibility just a decade ago.

Till next time,

Trade Treasury Payments (TTP)