Bank Payment Obligation
A Bank Payment Obligation (BPO) is an irrevocable undertaking given by one bank to another bank that payment will be made on a specified date after a specified event has taken place. This 'specified event' is evidenced by a 'match' report that has been generated by SWIFT's Trade Service Utility (TSU) or any equivalent matching application.
BPOs enable banks to mitigate the risks associated with international trade to the benefit of both buyers and sellers. They facilitate financing propositions across the supply chain, from pre-shipment to post-shipment. It is an assurance of payment to the seller like that obtained under a confirmed letter of credit.