HSBC Offers Trade Finance Tool to American Business Customers

HSBC has introduced a way to help American clients pay import duties.

HSBC TradePay for Import Duties is designed to simplify import duty payments while helping businesses optimize working capital, the bank said in a Wednesday (May 7) news release.

“Many corporates are currently facing changing working capital needs and increased upfront commitments,” the release said. “By settling payments of import duties directly and frictionlessly through HSBC TradePay, businesses can simultaneously access credit and complete payments, leading to more efficient settlement times and better visibility over cash flows.”

The release adds that the solution ensures import duty payments are made directly by HSBC, either via pre-agreed credit terms with brokers or direct ACH credits.

“Clients’ working capital needs are evolving — and we’re responding swiftly with solutions that deliver the most value to them,” said Vivek Ramachandran, HSBC’s head of global trade solutions. “By settling import duties directly and frictionlessly through HSBC TradePay, our US clients have more visibility and control over their working capital at the time they need it most.”

Launched in 2023, HSBC TradePay has made $2.3 billion of trade finance available across the world, the release added.

As PYMNTS noted in a report last month, trade finance is a critical force in reshaping international trade, beyond factors like tariffs and the shifting supply chains, with the World Trade Organization estimating that as much as 90% of trade relies on trade finance.

But trade finance has been slowed by the complexities of country-by-country regulations (in the case of international trade), tracking payments and manual processes. A World Bank report finds that trade credit is crucial for smaller businesses.

“It facilitates the exporters’ business development and sales diversification (credit opinions from credit insurers can be a major market intelligence tool),” the report said, adding: “It strengthens the balance sheet.”

Still, many smaller companies, particularly in the U.S., see financing as a challenge. The U.S. International Trade Commission found that 32% of small firms in the manufacturing space and 46% of small firms in the services industry view the in-place processes of trade finance as “burdensome.” And half finance requests from small businesses are turned down.

“The rise of embedded finance — and specifically tokenization, which is underpinned by blockchain technology — helps make trade finance more efficient by improving and speeding the transfer of, say, letters of credit and short-term financing,” PYMNTS wrote.

“Rendering the physical trade documentation that enables the financing (such as bills of lading or the terms of the financing itself) into digital representations over the blockchain allows for instant verification of the transaction and terms.”

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