FPT IS Company Limited (FPT IS) and TradeWaltz successfully conducted POC on the integration and implementation project of cross-border trade and trade finance transactions

March 8th 2024

In January 2024, FPT IS Company Limited (FPT IS), FPT Japan Holdings and TradeWaltz conducted Proof of Concept (PoC) for the TradeFlat and TradeWaltz integration project, with the aim to promote trade between the two countries and international trade. To date, the project has carried out PoC transactions (Proof of Concept - POC) successfully, with results exceeding the project’s initial expectations, and high efficacy has been confirmed.

With a speedy campaign, within just 3 months from the time of signing the cooperation agreement, FPI IS, FPT Japan Holdings and TradeWaltz (Japan) conducted a POC integrating the Trade Flat as the first digital finance ecosystem in Vietnam and TradeWaltz - Japan's leading trade information platform.

The selected POC transaction is import Letter of Credit (L/C). This is a cross-border trade finance operation on a large scale globally, with high complexity and the participation of many parties in the transaction.

As a result, the total cross-border transaction time decreased from 7-10 days for traditional L/C flow down to 171 minutes in the first test and to 76 minutes and 91 minutes for  Deferred L/C and L/C at sight and in the last test (3rd time) correspondingly. This result also exceeded the expectations of PoC stakeholders, since the initial goal was to optimize the time for the L/C process down to 120 minutes.

The parties participating in the POC process are leading companies and banks in Vietnam and Japan, including: Sojitz Corporation, Mizuho Bank… TradeFlat and TradeWaltz are platforms, which provide interoperating services for parties to participate in cross-border trade and trade finance activities.

The L/C issuance process includes following steps: (1) The importer in Vietnam creates a Purchase Order (PO) on TradeFlat and sends it to TradeWaltz for submission of the exporter in Japan; (2) The sales contract (COS) signed by both the importer and exporter is successfully uploaded on TradeFlat and TradeWaltz, while the importer in Vietnam digitally signs right on TradeFlat; (3) Import L/C requested by the importer to be issued and issued by the issuing bank in Vietnam right on TradeFlat and successfully sent to the advising bank in Japan for downloading and advice to the exporter on TradeWaltz; (4) When the L/C is issued, the exporter in Japan presents a set of shipping documents including Commercial Invoice (IV), Packing List (PL) and Bill of Lading (BL) on TradeFlat and for the Presenting Bank (5) The Presenting Bank presents those documents to the Issuing Bank to carry out the process of checking documents and accepting payment according to the Document Set (6) The Issuing Bank and Presenting Bank update the payment status of the L/C on TradeFlat.

The PoC trial run received positive feedback from participating enterprises and banks. The system highly simplifies L/C issuance, optimizes the presentation of electronic documents, enables it to be performed entirely on a digital platform, and especially shortens processing time as well as controls information of the transaction compared to the traditional L/C flow. From there, the parties aim for the common goal of promoting trade not only between Vietnam and Japan but also internationally.

In the coming time, FPT IS and TradeWaltz will continue to enhance the features on  both platforms, introduce them to potential customers, and put the system into operation as soon as possible.