Welcome to TradeFord.com, Join Free | Sign In | Premium Services
Home Forum Business Common Payment Methods used in International Trade

Common Payment Methods used in International Trade

List of payment terminologies commonly used in international trade:

T/T (Telegraphic Transfer): It means electronic transfer or wire transfer of funds overseas through banks. It usually takes 3-5 days to transfer the amount to sellers account globally.

Escrow: Escrow is a most common payment method used for both buyers and sellers protection globally. In this method buyer delivered the payment to a third party that usually called an escrow agent to hold the amount until buyer received the order in agreed-upon conditions. Where as the escrow agent will delivered the payment to the seller.

L/C (Letter of Credit): In this method a letter issued by a bank authorizing the bearer to draw a stated amount of money from that particular bank, its branches, or other associated banks.

In other words L/C is a guarantee, given by the buyer\'s bank, that they will pay for the goods exported, provided that the exporter can provide a given set of documents in accordance with clauses specified in the L/C and in a timely manner.

Cash in Advance: In this method buyer has to pay upfront cash to the seller before shipment. Considering that buyer is on 100% risk in this mode of payment.

Posted by: Saty on Feb 10 2012

Tags: Business

TradeFord.com is a growing B2B Trade Directory and Marketplace connecting global Importers, Exporters, Manufacturers and Traders at a reliable, common platform.

Let TradeFord.com match your sourcing needs with suitable supplier or manufacturer. Just fillout RFQ form and start getting quotations only from suitable supplier.

Wanted to learn How to Trade? Need advise for launching a new products? Whatever is in your mind... Click below to post a topic and start interacting with Trade Community!