The coronavirus pandemic has greatly affected the global letter of credit (L/C) confirmation industry according to a report published by Allied Market Research.

It says the global L/C confirmation industry wrote US$4.3 billion of business in 2019, a figure now expected to hit US$4.99 billion by 2027.

Coronavirus impacts

Rising non-payment risks, increased demand for customised trade services and the post-coronavirus pandemic emergence of stricter trading terms and conditions will all drive the growth of the global L/C confirmation market according to the report.

But it adds that a surge in fraud and cyber-attacks will hamper market growth.

Market prospects

Sight L/Cs dominated the market in 2019 with a market share of more than two-thirds due to their payment features according to the report, Letter of Credit Confirmation Market by L/C Type (Sight L/Cs and Usance L/Cs), and End User (Small Enterprises, Medium-sized Enterprises, and Large Enterprises): Global Opportunity Analysis and Industry Forecast, 2020-2027.

But it concludes that the usance L/Cs segment is expected to register the highest growth of 4.1 per cent during the forecast period.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.