German corporates execute commercial trade transaction on Marco Polo network
Automotive group Daimler AG and machine builder Dürr AG have digitally processed a data transfer to secure payments from a commercial trade transaction on the Marco Polo platform, using Corda blockchain technology – a first for companies listed on German stock indexes DAX and MDAX. LBBW, a founding member of Marco Polo, provided the financing and the payment commitment.
Securing payments from foreign commercial trade transactions with traditional instruments is typically complex and time-consuming, due to the use of different systems, the large number of involved intermediaries, and the large amount of paperwork involved. The successful exercise of the joint project with LBBW convinced both Dürr und Daimler that this process can be streamlined and made more efficient. Assisted by distributed ledger technology (DLT), it was accomplished within minutes instead of days. The underlying transaction between the enterprises involved the order and delivery agreement for a balancing system from Dürr subsidiary Schenck via the Marco Polo network, and payment was secured by a conditional payment commitment by the buyer’s bank.
Upon equipment delivery, the associated order fulfilment data were uploaded into the network and automatically reconciled with the previously agreed transaction data. In turn, this triggered the irrevocable payment obligation. The entire data flow was mapped by R3’s Corda blockchain platform. To prepare the first phase of live-production, the back-end integration into the bank’s management systems were also tested for the first time.
For LBBW, which joined the Marco Polo network as a founding member last year, this was the third pilot transaction via Marco Polo, following the two previous business deals with industry partners Voith and KSB.