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Lloyds and Mercore complete landmark digital transactions in secondary market

 

Lloyds and Mercore have completed a series of landmark digital transactions that have featured the secondary participation in an accepted digital bill of exchange.

Lloyds
Published on: 12 May 2025
3 min read
  • Innovative process significantly cuts secondary purchase completion times, unlocking greater liquidity.
  • Using digital negotiable instruments in the secondary market could make global trade more efficient.

 

The innovative process enables businesses who are not utilising electronic trade documents to enter into secondary participations.

The transactions, believed to be the first of their kind, represent a milestone in trade distribution and demonstrate enhanced support for clients’ working capital management by significantly reducing deal completion times, therefore unlocking greater liquidity.

The trades involved shipments of sugar by Mercore’s client from Central America to a longstanding client of Lloyds in the UK. These were underpinned by a DBE which was drawn by the exporter and accepted by the importer. On confirmation of acceptance by Lloyds, Mercore funded the transaction against the DBE, with Lloyds participating in the transaction from Mercore under a Master Participation Agreement, allowing increased liquidity for the transaction flow.

These landmark transactions show the feasibility, and benefits, of using digital negotiable instruments (DNIs) openly in the secondary market.

Speeding up cross-border trade

Traditionally, secondary purchases of bills of exchange in trade finance have relied on physical paper instruments. Using digital trade documentation significantly speeds up the completion of secondary transactions, reducing transaction times from days to – in some cases – a matter of hours.

Our investment in trade innovation is continually unlocking new and impactful solutions to support our clients’ trading ambitions. We have previously showcased digital flows for primary transactions, and this latest trade is a great example of our technological solutions in action in the secondary market space. Combined with continued uptick in the use of digital negotiable instruments to deliver trade financing, a vibrant digital secondary market could help extend the funding of cross-border trade, helping more businesses around the world trade more efficiently.

Surath Sengupta Head of Trade and Working Capital for Lloyds

This type of secondary market collaboration between Mercore, as a non-bank lender, and a relationship bank, like Lloyds, is key to driving improved financial inclusion for aspiring businesses. By combining Mercore’s and Lloyds’ respective areas of client coverage, while leveraging the benefits of digital innovation, we are able to improve the amount of financing available, and the speed of funding for both new and existing commercial trade flows. We are delighted to work with trusted parties such as Lloyds and Enigio to deliver this offering.

Anthony Wadsworth-Hill Co-founder & Deputy CEO at Mercore

Congratulations to Lloyds and Mercore on this fantastic milestone. As the technology provider, Enigio is proud to support such innovative work. This is a true testament to Lloyds’ and Mercore’s commitment to advancing digital trade not in theory but through live, impactful transactions. The successful use of digital negotiable instruments in the secondary market is particularly exciting, as it highlights the growing maturity of digital trade finance and the tangible benefits of faster, more secure processes that unlock greater liquidity.

Alex Waites Executive Director at Enigio


World-first transactions

This development follows a series of other world-first transactions completed by Lloyds and Mercore in October 2024 – the first transactions under the ITFA’s Digital Negotiable Instrument (DNI) initiative to feature a node-to-node transfer of a digital trade document between two financial institutions, and the first to involve the handling of a DNI between two financial institutions each facing off to an importer or exporter, known as “Four-Corner” transactions.

All transactions, including these latest secondary deals, were completed using Enigio’s trace:original solution, which removes the need to physically transfer paper negotiable instruments, enabling the creation of digital documents that can be ‘possessed’ by an individual, transferred between parties and distinguished from copies, just like paper-based counterparts. 

Unlike other systems, only the party creating the document needs to be an Enigio user, enabling broader market participation. Secondary purchasers can take possession of digital bills of exchange without signing commercial terms with Enigio, utilising their public notary solution available on the platform’s website. Alternatively, if they do not wish to hold the assets themselves, these can be held by the executing party on their behalf.

 

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