OPINIO
Trade4go
Feb 25th, 2025
Original content
Host: Mzingaye Ndubiwa - Global Market Analyst (South Africa)
Presenter: Juhee Yoon - Team Lead Pay & Exchange (HQ)
Speakers: Alper Akkurt - Global Supply Chain Manager - (Türkiye)
Samson Lui - Compliance Officer/MLRO (Hong Kong)
Juhee Yoon - Team Llead Pay & Exchange (HQ)
Agenda:
The agri-food industry is no stranger to challenges, particularly when it comes to ensuring secure and reliable trade settlements. Buyers often face significant risks, such as suppliers disappearing or declaring bankruptcy after receiving prepayments or cash against documents (CAD). This leaves buyers without their goods and with substantial financial losses. On the other hand, suppliers are not immune to risks either. They frequently encounter issues like buyers reneging on agreements, unexpected disruptions, or disputes over quality that lead to incomplete payments. These challenges are further exacerbated by the rising prevalence of fraud in agri-trade, which has made the need for safer settlement methods more urgent than ever. Alarmingly, the business-to-business (B2B) agri-food sector experiences more fraud than any other trade industry, with annual losses reaching an astounding USD 22.7 trillion globally.
Recognizing these pressing issues, Tridge has emerged as a globally recognized agri-food company with operations spanning across the world. Over the past decade, Tridge has leveraged its extensive global expertise to address the unique challenges of the agri-food industry. By deeply understanding the complexities of agri-trade, Tridge has positioned itself as a solutions provider, offering innovative tools and services to mitigate risks and foster trust between buyers and suppliers.
One such solution is Tridge Pay, a robust financial product designed to address the critical need for safer settlement methods in agri-trade.
Figure 1. Tridge’s Global Coverage
Source: Tridge
Traditional payment methods in international trade, such as Letters of Credit (L/C), CAD, and private escrow services, present significant challenges for buyers and suppliers. While L/Cs offer a degree of security by leveraging the bank's credit, they are often inaccessible to small and medium-sized businesses (SMBs) due to high financial and operational costs and credit limitations. On the other hand, CAD is a common method but lacks binding terms, making it easy for either party to break obligations. Buyers face risks such as delayed shipments or losing their advance payments, while suppliers struggle with non-payment or altered terms. Although secure, private escrow services are prohibitively expensive and cumbersome, leaving many businesses without a practical solution. These limitations create bottlenecks in trade, particularly for SMBs, and highlight the need for a more accessible, secure, and cost-effective payment system.
Figure 2. Regular Ways in Trade Payments
Source: Tridge
Tridge Pay addresses these pain points by offering a tailored, flexible, and secure payment solution designed to minimize risks and enhance trade efficiency. Unlike traditional methods, Tridge Pay enforces supplier compliance through a staged payment structure. Suppliers must begin shipment after receiving an initial down payment, with subsequent payments tied to shipment progress, such as uploading a Bill of Lading (BL) copy or confirmation of actual shipment. This approach ensures that buyers can verify shipment progress before making additional payments, reducing the risk of delays or non-compliance. This structure provides a reliable framework for suppliers that encourages shipment while offering better negotiation opportunities with global buyers. Tridge Pay fosters more stable transaction conditions and increases the likelihood of deal closure by reducing the buyer's cash flow burden and enabling partial down payments.
Figure 3. Tridge Pay Escrow Bank by Deutsche Bank
Source: Tridge Pay
Tridge Pay also offers significant cost advantages over L/Cs. While L/Cs involve complex paperwork, lengthy processing times (5–10 days), and high fees (1% or more of the transaction value, plus additional charges), Tridge Pay simplifies the process with real-time transaction monitoring, faster processing (1–3 days), and lower fees (up to 0.7% of the transaction value). Unlike L/Cs, which consume bank credit limits, Tridge Pay does not affect corporate credit lines, ensuring greater cash flow flexibility. Additionally, its escrow-based system secures funds and reduces risks of delayed or canceled payments, providing a more secure alternative to traditional "100% upfront or no payment" models.
By eliminating the reliance on beneficiary banks and financial credit, Tridge Pay expands accessibility for global buyers and suppliers, enabling more businesses to participate in cross-border trade. Buyers benefit from reduced financial burdens and increased confidence in their transactions, while suppliers gain access to a broader market and improved deal closure rates. Tridge Pay's robust business verification process further mitigates counterparty risks by ensuring all parties' identity and risk profile. This innovative solution not only addresses the limitations of traditional payment methods but also enhances product competitiveness and fosters trust in international trade.
Tridge panel discussion speakers Alper Akkurt, Juhee Yoon, and Samson Lui analyzed the advantages of alternative payment solutions over traditional methods like L/C in global trade. While L/Cs offer strong credit and Anti-Money Laundering (AML) risk protection, they are costly, slow, and reliant on the credibility of issuing and negotiating banks, which can still be vulnerable to fraud. Alternative solutions, such as digital escrow-based payments, address these issues by offering lower costs, faster processing (1-3 days versus 5-10 days for L/Cs), and greater accessibility for SMBs without requiring bank approvals. These solutions also build trust between buyers and suppliers, reducing fraud risks and enabling smoother transactions. Akkurt highlighted how financial inefficiencies in agri-trade often hinder exporters' and suppliers' growth and profitability. For instance, Türkiye exporters could significantly improve their cash flow by eliminating banking delays, which previously slowed down transactions and tied up capital. Similarly, West African cocoa cooperatives managed to increase their export volumes by reducing the high costs associated with letters of credit (L/C), enabling them to compete more effectively in global markets. Escrow services like Tridge Pay bridge gaps in trade finance, particularly in regions with limited banking options, by providing cost-effective oversight and supporting the growing participation of emerging markets in global trade.
Tridge speakers continued the panel discussion and shed light on how secure payment solutions like Tridge Pay can significantly improve negotiations with global suppliers compared to T/T (Wire Transfer) by addressing the risks faced by both buyers and suppliers. For buyers, Tridge Pay ensures peace of mind by safeguarding payments until goods are delivered as agreed, reducing risks such as shipment delays, fraudulent documentation, or substandard goods. For suppliers, it guarantees timely and full payment, eliminating concerns over non-payment, chargebacks, or disputes. By bridging the trust gap in agri-trade, Tridge Pay mitigates risks and fosters smoother, more reliable transactions, enabling businesses to focus on growth rather than financial uncertainties. A buyer from India placed a large order for apples from a Turkish supplier. To secure the shipment, they made a significant advance payment. However, the shipment never took place, and the supplier disappeared, leaving the buyer with no way to recover the funds. This case highlights the risk of making large advance payments without proper safeguards. In another example, a buyer from Dubai attempted to purchase eggs from a supplier, also making an upfront payment to secure the order. Despite completing the payment, the goods were never delivered, and the supplier ceased communication. This serves as another example of how buyers can fall victim to fraudulent transactions when payment terms are not carefully managed. Real-world cases, such as fraudulent apple and egg trades, highlight the dangers of advance payments without safeguards, and document manipulation during shipment further underscores the need for secure systems. Tridge Pay’s escrow system ensures payments are held securely until all contract terms are met, protecting both parties and fostering trust. Unlike L/Cs, which impose high costs and burdens, Tridge Pay offers equal benefits with less financial strain. Its robust AML framework, adherence to Hong Kong’s the : Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) standards, and comprehensive due diligence on all parties ensure legitimacy and security. Additionally, live transaction monitoring and control mechanisms, such as trade freezing, provide oversight and mitigate risks, making Tridge Pay a reliable and efficient alternative for global trade.
On a final note about what steps buyers can take to reduce financial burdens, Tridge speakers pointed out that balancing security and accessibility is a key challenge in global trade. Buyers can adopt alternative strategies to reduce financial burdens while maintaining secure transactions. Reducing reliance on high-cost financing, such as L/Cs, using escrow-based models provides similar security at a lower cost. Structured payment terms, like phased payments (e.g., an initial deposit followed by final payment upon shipment verification), improve liquidity and reduce cash flow pressure. Additionally, offering secure, guaranteed payments helps buyers build smoother supplier relationships, reducing demands for prepayment and enabling better pricing or terms. For example, phased payments have supported vegetable exporters in Türkiye by easing cash flow, allowing them to better manage operational expenses and maintain steady production cycles. This approach not only reduces financial strain on exporters but also builds trust with suppliers by ensuring they receive timely and predictable payments, fostering stronger and more reliable trade relationships.
In contrast, secure payment systems have allowed Senegalese mango exporters to access international buyers and boost trade volumes. This financial security has not only increased trust between sellers and buyers but also enabled exporters to invest in better packaging and logistics, ensuring higher-quality deliveries to global markets. Solutions like Tridge Pay further enhance efficiency by expediting trust-building with new trade partners, conducting thorough due diligence that has been valid for years, and ensuring compliance as a cost-saving measure rather than a burden. This approach prevents fraud, disputes, and delays, allowing buyers to confidently engage in global trade and reduce financial strain.
Click here to view the webinar recording, or click here to see the presentation slides.
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