What are the payment methods for foreign trade?

1. There are three payment methods for foreign trade: LetterofCredit (letter of credit), TelegraphicTransfer and DocumentagainstPayment. Among them, letters of credit are used the most, followed by telegraphic transfer, and documents against payment are less.

Second, the noun explanation

1, letter of credit is the most commonly used payment method in international trade at present, and it is a letter of credit guaranteed by a bank. As long as you provide the corresponding documents to the bank according to the terms of this contract, you must pay the money to you. Therefore, it should be said that letter of credit is a very safe payment method in theory. Reliable letters of credit can even be used as collateral to obtain loans from banks, which is convenient for sellers to package loans with letters of credit. But in practice, letters of credit are sometimes not so safe. The reason is that there may be soft clauses in the letter of credit that are difficult for you to do, resulting in artificial inconsistency.

2. T/T is a very simple operation mode, which can be divided into pre-T/T and post-T/T. Pre-T/T means to pay a part of the deposit, usually 30%, after the contract is signed. After the production is completed, notify the payment, pay off the balance, and then deliver the goods and deliver a full set of documents.

D/P D/P is a way to deliver documents under documentary collection, which means that the exporter's payment documents are based on the importer's payment, that is, the importer can only collect documents from the collecting bank after paying. D/PatSight means that the exporter draws a draft at sight, and the collecting bank reminds the importer that the importer must pay after seeing the draft. After payment, the importer gets the shipping documents.

Three. Comparison between telegraphic transfer and letter of credit

Compared with letter of credit, 1 and T/T are very simple and flexible, such as tight delivery, changing packaging and so on. It doesn't matter as long as the customer agrees. If it is a letter of credit, the letter of credit must be amended, otherwise, if there are discrepancies, the customer can refuse to pay.

2. The cost of telegraphic transfer is lower than that of letter of credit, and the bank deduction is less, generally tens of dollars. Letters of credit sometimes cost hundreds of dollars. So some factories set the telegraphic transfer quotation lower than the letter of credit. However, generally speaking, if the documents are fully prepared and the collection is guaranteed by the bank, the letter of credit is more reliable than the telegraphic transfer. With a letter of credit, you can go to the bank to package loans, and the financial pressure is not great. However, in countries with poor bank credit or strict foreign exchange control, letters of credit are very risky.

T/T and L/C have their own advantages and disadvantages. If telegraphic transfer is combined with letter of credit, it is quite safe, 30% telegraphic transfer and the rest letter of credit.

Extended data

Foreign trade settlement, or collection, as the name implies, is foreign trade collection, which can be simply divided into two categories.

1, online payment, you can directly complete the payment online, which is fast and convenient. The third-party payment company guarantees that it can refuse to pay, and the interests of consumers are guaranteed. On the other hand, the relative risk has increased, mainly by a small amount. Mainly used for online earning, foreign trade retail and small collection.

① Electronic accounts: the main payment methods are electronic accounts to electronic accounts (similar to Alipay and Alipay transactions, both parties need to register and own accounts), mainly including Paypal, MoneyBookers, Ap, Googlecheckout, LR, etc.

② International credit card payment: Third-party credit card payment companies provide payment channels to achieve the purpose of collection, which are payment++payment++modes (similar to online banking payment), mainly including ChronoPay, IPS, PayEase, Double Pay (95Payay), ePay (ECPSS)Gspay, online banking and Motopay.

2. Bank remittance mode, mainly through bank transfer and remittance company. Convenient for large payment, safe, not suitable for small collection, high cost. Once the funds are issued, they cannot be recovered and there is no protection for consumers. Mainly used for wholesale foreign trade collection. There are mainly T/T (), L/C, Western Union (Wu, International Express Company) and MoneyMoney (MG, Global Express Service).

Refer to Baidu Encyclopedia for foreign trade settlement.