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Rather under the radar, the Global Supply Chain Finance Forum published a description of the Bank Payment Undertaking (BPU) technique in June 2023, but elsewhere on the GSCFF website is a previous iteration of what a BPU entails serving as a placeholder for the technique’s description that is in the process of being drafted.
The June 2023 document of 8 pages leads with an opening paragraph to its definition section that: “A Bank Payment Undertaking (BPU) is provided under a buyer-led programme within which Sellers in the Buyer ’s supply chain receive an independent and irrevocable payment undertaking from the Buyer ’s Bank, also referred to as BPU Bank, to pay one or several accepted invoices(s) or account(s) payable on its books (Accepted Invoices) on the due date. The BPU Bank becomes the primary obligor to make the payment to Sellers. Such payment to a Seller covers the Seller ’s invoices resulting from trade transactions.”
A transaction illustration, distinctive features, risks and benefits are among the sections that round out the document.
Beyond whether there has been any tangible market reaction or notable usage of the BPU, the question is whether specialists are aware of the BPU and this description document?