- Instrument
- Documentary credit
- Raised by
- Beneficiary or issuing bank
- Priced as
- Confirmation commission
- Risk covered
- Issuing bank and country risk
What LC confirmation actually does
A letter of credit moves payment risk from your buyer to your buyer’s bank. That helps only if you can take exposure to that bank, in that country. Confirmation adds a second undertaking that stands on its own: the confirming bank is itself obliged to honour a complying presentation made to it, and then looks to the issuing bank for reimbursement. You are not waiting for the issuing bank to default first — you present to the confirming bank and get paid.
The commission for that undertaking is the number that moves most in a confirmation. It turns on the issuing bank, the country, the tenor and how much appetite a confirming bank has for that name this week — which is why asking one bank gives you one price, and asking several gives you the market.
Our LC suite gives you the platform to bid or get competitive rates for your transactions lightning fast — whether it is LC confirmation, LC discounting, or both. The requirement is posted once and every interested bank prices the same set of facts.
The shape of the flow
Two undertakings, stacked. The issuing bank promises to pay; the confirming bank adds its own promise on top, and that is the one the beneficiary can rely on.
How it works on TradeOrigin
Four steps, all on the platform, with the bidding sealed from end to end.
Post the credit
Upload the LC or key its terms: issuing bank, country, amount, tenor, expiry and the documents called for. Amendments attach to the same deal.
Banks bid the commission
Registered confirming banks review the credit and submit their pricing. The bidding process is completely confidential and secure — no bank sees another bank’s number.
Compare and accept
Compare on commission and on the bank standing behind it. Accept the bid that suits and the mandate is recorded, with the accepted terms fixed on the deal.
Execute and track
Presentation, discrepancies and settlement all sit on the same record, with a real-time audit trail of who did what and when.
Who it is for
Beneficiaries under a credit
You have won the order but cannot carry the issuing bank’s risk, or your own bank will not take it without a confirmation in place.
Looking for a correspondent
Your client’s beneficiary wants the credit confirmed and you need a correspondent willing to add its undertaking at a sensible price.
Originating FI trade assets
Financial institutions can leverage the platform for originating FI trade deals like LC confirmation from banks globally, on names that fit their appetite.
What you get
A real price, not a quote
Several banks pricing the same credit at the same time is the only honest way to know what confirmation costs on that name today.
Confidential by design
Bids are sealed. Banks price on the facts of the credit, not on what a competitor just offered.
No email archaeology
The credit, its amendments, the bids and the acceptance all live on one record instead of scattered across inboxes.
Attributable approvals
Acceptance and signature happen on the platform under MFA, so every approval has a name and a timestamp against it.
What the bank will ask for
Uploaded once, against the deal, and visible only to the counterparties on it.
Questions
Does the credit have to authorise confirmation?
For a true confirmation, yes — the credit has to be issued authorising it, and the confirming bank is nominated in it. Where it does not, a bank can still take the risk as a silent confirmation, which prices differently because it sits outside the credit. Bidding tells you what each route costs before you commit.
Can the issuing bank raise the request instead of the beneficiary?
Yes. Both sides run on the same platform: an issuing bank can seek a correspondent to add confirmation, and a beneficiary can seek a confirming bank directly.
Is silent confirmation supported?
The platform carries the commercial terms you agree with the confirming bank. Whether the confirmation is advised through the issuing bank or arranged silently is a matter for those terms.
Related
LC Discounting
Turn an accepted deferred-payment credit into cash today, at a discount rate banks bid for.
ProductCounter Guarantee
A bank’s guarantee to a second bank, so the second bank can issue locally where the beneficiary needs it.
ProductRisk Participation
Share trade exposure with other banks — funded or unfunded — to free up limits and spread risk.