Internet-driven transformation.

Bolero International Ltd., an electronic trade community four years in the making, plans to open for business on Monday. A company that is often compared to Bolero -- two-year-old TradeCard -- is set to launch its services in the fourth quarter.

Both seek to eliminate inefficiencies in trade documentation and financing by electronically connecting buyers and sellers on the Internet.

Bolero, an initiative of the Through Transport Club of London and Brussels-based Society for Worldwide Interbank Financial Telecommunication, or Swift, a bank-owned telecommunications network for payment messages, is seeking banks to become founding members. Such a commitment would involve a three-year contribution of time and resources, said Peter Scott, commercial director of the London-based company.

No bank has signed on, but Barry Morse, chief executive officer, said, "I think most every major trade bank we know is seriously looking at it."

Commerzbank of Germany, which has tested Bolero with one of its largest customers, is one of these. Its test with Otto Versand GmBH & Co., the world's largest mail-order company, indicated that the bank could reduce its costs through Bolero, though Petra Eberlein-Kemper, senior vice president, did not say by how much.

Rifky H. Mackeen, vice president of global trade services and director of strategic product development at Citigroup Inc.'s Citibank unit, said he expects Bolero to reduce a bank's costs by at least 10% and perhaps as much as 50%.

However, both Ms. Eberlein-Kemper and Mr. Mackeen, who spoke about Bolero at the annual conference of Swift in Munich last week, emphasized that the ability of Bolero to foster the development of new services is more important than its cost-saving features.

"Bolero will let us offer custom-made solutions, the most important distinction," Ms. Eberlein-Kemper said.

New York-based TradeCard touts itself as the next E-Trade or, with officials saying it will reinvent the way international trade is carried out. "We are taking a business that has been done the same way for hundreds of years and creating a new process that is faster, cheaper, and easier," said Kurt Cavano, chief executive officer of TradeCard.

TradeCard is a payment and settlement system that is an alternative to letters of credit. It has patented network software that tracks shipment of goods, compares delivered items against purchase orders, and originates payments on behalf of the buyer.

A handful of banks, including Bank of America Corp., have already agreed to work with TradeCard. The company will also soon announce its selection of a vendor to issue and manage digital certificate tokens, which are smart cards that would contain the digital credentials of a corporate trading partner's identity on-line.

TradeCard has apparently rattled large banks because it promises to eliminate the need for letters of credit for many international trade deals, said Avivah Litan, research director at GartnerGroup.

TradeCard unsuccessfully tried to set up a business model that included banks, Ms. Litan said. Now the company "competes with banks. It's blatant."

Mr. Cavano, a former vice president of American Management Systems Inc., said, "Banks do not know what to make of TradeCard. They think it is a good opportunity, but they are also afraid of us."

He said a handful of banks will eventually lose market share in the letter of credit business, but other banks, which could not afford to be in the business to begin with, could work with TradeCard to "reposition themselves in the market."

He added, "It's a classic case where you can eat your own lunch, or someone can eat it for you."

Mr. Cavano said comparisons of TradeCard with Bolero are mistaken, since Bolero is an appropriate electronic commerce network for bulk shipments of commodities, such as oil. Bills of lading associated with commodities -- which act as title to the goods -- are transferable, and are sometimes sold during shipment.

TradeCard, on the other hand, would target importers and exporters that deal in finished goods, such as toys, electronics, and clothing. The bills of lading for these transactions are already consigned to the purchaser. Letters of credit are not an appropriate payment method for consigned shipments, Mr. Cavano said, especially as the world moves more to a "just in time" inventory model.

The World Trade Center Association, which founded TradeCard, is a minority investor in the company. Primary shareholders are GE Information Services, a Rockville, Md.-based electronic trading community of 40,000 companies; Marsh & McLennan Co., an insurance firm that plans to provide cargo insurance and risk management services to TradeCard users: and E.M. Warburg, Pincus & Co., a New York venture capital firm.

Chris Costanzo contributed to this article.

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