There are several basic methods of receiving payment for products sold abroad.  Some of these methods are:

• Cash in advance
• Letter of Credit
• Documentary, collection or draft
• Open Account
• Other payment mechanism, such as consignment sales

Since getting paid in full and on time is of utmost concern to exporters, risk is a major consideration.
Cash in advance while the most desirable to the seller maybe the lease desirable for buyer as paying in advances increases their risk
Letter of credit is essentially a bank's promise of paying the exporter to that of the foreign buyer when the exporter has compiled with all the terms and conditions of the letter of credit.  It is the foreign buyer that applies for issuance of a letter of credit to the exporter and is therefore called the applicant and the exporter the beneficiary. In the instance of a U.S. export transaction, the letter of credit is issued by a foreign bank and subsequently confirmed by a U.S. bank.  Requirement for a bank confirmation is not only determined by the foreign buyer's credit but also political or economic risk associated with the country in which the bank is located.
A draft also called a bill of exchange is analogous to a foreign buyer's check. Like checked that are used in domestic commerce, drafts sometimes carry the risk of being dishonored
Open Account is a convenient method of payment for the buyer and is used in a well established and demonstrated payment record between parties. Under the open account, the exporter simply bills the customer, who is expected to pay under agreed terms at a future date.
Consignment Sales occurs when the material is shipped to a foreign distributor to be sold on behalf of the exporter. The exporter retains title to the goods until they are sold by the distributor.  Once the goods are sold , payment is sent to the exporter.

WHAT IS UNIQUE ABOUT OUR TRADE PAYMENT SERVICE

We are an intermediary between the buyer and seller that ensures the seller gets paid and the buyer receives the goods.  This provided added confidence on both parties side and sometimes can be the deciding factor for a buyer to purchase from you.  It is also an exceptional way to bypass the risk of Cash in advance or the length paperwork and credit requirements of Letter of Credit.  Visit our How it Works and start purchasing or getting paid today.

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