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FIFTH THIRD BANCORP PROVIDES ONLINE LETTERS OF CREDIT THROUGH TECHNOLOGY PLATFORM DESIGNED BY EC-FINANCE Recognizing an Early Market Opportunity in Online Trade Financing for B2B buyers and sellers New York and Cincinnati, October 10, 2000 - ec-Finance (ECF) and Fifth Third Bancorp jointly announced today that the bank will issue Letters of Credit through ECF’s FASTLC™, the first online LC product for B2B exchanges, beginning October 2000. This Web-based financing option allows buyers and sellers on B2B exchanges to complete financing of their transactions online in an efficient and secure environment. “In step with our long-term philosophy, Fifth Third continues to execute on the basics by providing the international business community with a new, forward-looking trade financing tool to help them compete in an increasingly competitive market,” stated John K. Perez, vice president, international banking, Fifth Third Bancorp. “With FASTLC, Fifth Third is able enter the online import/export trade financing business by offering Internet-based Letters of Credit to B2B exchanges as a bank payment partner with ec-Finance.” ec-Finance provides online trade financing products ideally suited to facilitate the entry or expansion of established financial institutions, buyers and sellers, and B2B exchanges into international trade in the New Economy. "ec-Finance selected Fifth Third based on its global presence, recognized technological capability and financial strength -- offering an excellent payment partner for our B2B exchange network and its customers," stated Janet Handal, president of ec-Finance. "Being named the #1 e-business innovator by PC Week clearly confirms Fifth Third's e-commerce leadership position in international banking community." Together, FASTLC and Fifth Third will enable B2B exchanges and their customers to rely upon the bank’s long accepted role as a trusted third-party in international trade transactions. FASTLC greatly facilitates the trade process by acquiring transaction information and payment instructions from B2B sites and passing the transaction to one of its bank payment partners for execution. B2B customers will be able to select Fifth Third to execute the LC from ec-Finance’s roster of payment partners. “Online trading exchanges are linking buyers and sellers to products and distribution channels all over the world at an astounding pace,” stated Peg Wyant, managing director, Isabella Capital, and board member/investor, ec-Finance. “Once again, Fifth Third is taking the leadership role in servicing this rapidly growing market through ec-Finance’s superior products and insightful approach to the import/export business in the B2B exchange space.” With offices in Brussels and Hong Kong, Fifth Third’s global expertise and technological sophistication helps companies compete effectively in the international marketplace. A leader in e-commerce, Fifth Third was named #1 e-business innovator by PC Week. Equipped with the vast resources of one of the nation’s strongest financial institutions, Fifth Third is uniquely qualified to simplify and speed clients’ ability to conduct business overseas. Moving to the forefront of the international banking industry in the Midwest, Fifth Third’s international products and services include international paying & receiving, letters of credit/documentary collections, foreign exchange trading/hedging services (including Internet-based), automated wire & draft system, international corporate lending, banker’s acceptances, export financing, Multi-Currency Advantage accounts and Can-Link accounts. About
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ec-Finance * * * Note: Background Information on Letters of Credit and Trade Finance What is a Letter of Credit? Letters of Credit (LC) are an integral part of international business. An LC is a financial instrument issued by a bank to pay a seller on behalf of a buyer, providing the seller meets the terms and conditions stated in the credit application. Banks act as intermediaries and have no actual contact with the goods bought and sold. How does the traditional LC process work? Once the buyer and seller agree to the terms of the sale, the buyer applies for an LC with an issuing bank. Following the issuing bank’s approval, the LC is sent to the advising bank, which represents the seller. The seller receives the LC and confirms all terms and conditions; ships the goods to the buyer, and prepares necessary documents (invoice, transport document) for presentation to the advising bank. If these documents comply with the terms and conditions in the LC, the issuing bank pays the seller through the advising bank. The advising bank then forwards the documents to the issuing bank for presentation to the buyer for release of the goods.
The Letter of Credit is an ideal instrument for international, as well as domestic, transactions between parties who have not previously done business together, because LC payment is always contingent on the seller’s precise satisfaction of the buyer’s agreed upon terms specified in the LC, including quantity and specified documents. Unlike credit card purchases or escrow accounts, the issuing and advising banks offer protection to the buyer and seller by ensuring delivery and payment in the form of a credit product once all stated terms and conditions have been satisfied. Another distinct advantage, the LC process ensures that an established financial institution continues to act as the trusted third-party for actual funds transfer. What are B2B exchanges and who is using them? B2B exchanges are Internet-based sites for conducting international and domestic trade, linking buyers and sellers to an endless number of products and distribution channels all over the world. At present, approximately 600 B2B exchanges are in operation throughout the world. A recent Forrester Research survey of B2B exchanges reported that only 52 percent of these B2B exchanges arrange credit and offer alternative payment options today. However, 98 percent of these existing exchanges plan to offer trade financing options by 2001. For an example of an active B2B exchange, see www.commodinet.com. |
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News Are On-line Letters of Credit in Your Future? Provident Bank Provides FastLC Commodinet Seeks Local Partners Janet Handal Presents at Springboard Fifth Third Partners with ec-Finance Isabella Capital Celebrates Women CEOs Fifth Third Providing Online Letters of Credit Fifth Third To Offer Online Letter of Credit B2B Gets Online Letters of Credit 5th-3rd Bancorp Provides FastLC TradeEasy Offers Customers ECF's New Web-based Financing Alternative ec-Finance Signs Commercial Bank of San Francisco ec-Finance Signs First Bank Client For Trade Finance VolumeLink offers FastLC to its B2B users FastLC adds LC capability to Commodinet Incubator Network Sharing to Boost Membership of MCI ec-Finance.com Wants To Tap Local B2B Business 3 New Online Tools Automate L/Cs and International A/R Online L/C Product Launched for B2B International Trade Commodinet & ec-Finance.com Collaborate
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