There are three payment methods commonly used in foreign trade:

1. Letter of Credit (L/C for short) with various types;

2. Remittance mainly includes Telegraphic Transfer (T/T), Mail Transfer (M/T) and Demand Draft (D/D).

iii. Collection, mainly including Documents against Payment (D/P) and Documents against Acceptance (D/A).

D/P is D/P. After delivery, we prepare our negotiation documents and deliver them to the customer's bank through our bank. The customer's bank will remind the customer that the documents have arrived, and the customer will deliver the documents after payment.

D/A is D/A, and D/A is also delivered to the customer's bank through our bank. The difference is that customers can take away the original documents only by accepting our documents, and then pay them after maturity.

T/T is telegraphic transfer (documents are usually mailed directly to customers by us, without going through the bank). If we use T/T payment method with customers, the general practice is that customers should give us 31% advance payment first, and the general insurance method for the remaining 71% is that after the goods are shipped, the guests will pay by the original bill of lading faxed by us, and then mail the whole set of original documents to the guests after the payment is received.

D/P for collection and payment, D/A

D/A for D/P, and D/A for cancellation of tax refund. The difference between D/P and D/A for logistics freight forwarding is that D/P must pay the bill, and pay the bill of lading first. If the bank releases the bill privately, the responsibility lies with the bank; D/A importers can take the bill of lading after paying the payment XX days after accepting the bill of exchange. If they fail to pay the payment within the time limit, the bank is not responsible.

D/P Documents against payment is a method of delivering documents under documentary collection, which means that the exporter's documents are paid by the importer, that is, the importer can only collect documents from the collecting bank after paying. D/P Sight means that the exporter draws a draft at sight, and the collecting bank reminds the importer that the importer must pay after seeing the bill. When the payment is paid, the importer obtains the shipping documents.

D/P after sight or after date means that the exporter issues a time draft, the collecting bank presents it to the importer, and after it is accepted by the importer, the importer pays the redemption bill on or before the maturity date of the draft.

D/A Documents against Acceptance is a way for exporters (or collecting banks) to deliver documents to importers on the condition of acceptance under documentary collection.

the so-called "acceptance" refers to the bill payer's (importer's) acceptance of the bill when the collecting bank presents the usance bill. The procedure of acceptance is that the drawee signs the bill, notes the word "acceptance" and the date, and returns the bill to the holder. No matter how many times the bill has been transferred, the drawee should pay by bill on the maturity date of the bill. 6T)V+y.p5A+c9D)E

You can do the above except D/P Sight, others are risky (compared with L/C), but there are also customers who don't pay the redemption bill due to market price and other problems. If you want to do it, you can only be old customers with good reputation and long-term contacts.

D/P Documents against payment is a method of delivering documents under documentary collection, which means that the exporter's documents are paid by the importer, that is, the importer can only collect documents from the collecting bank after paying.

D/P at Sight means that the exporter draws a draft at sight, and the collecting bank reminds the importer that the importer must pay after seeing the bill. When the payment is paid, the importer obtains the shipping documents.

D/P after sight or after date means that the exporter issues a time draft, the collecting bank presents it to the importer, and after it is accepted by the importer, the importer pays the redemption bill on or before the maturity date of the draft.

D/A Documents against Acceptance is a way for exporters (or collecting banks) to deliver documents to importers on the condition of acceptance under documentary collection.

the so-called "acceptance" refers to the bill payer's (importer's) acceptance of the bill when the collecting bank presents the usance bill. The procedure of acceptance is that the drawee signs the bill, notes the word "acceptance" and the date, and returns the bill to the holder. No matter how many times the bill has been transferred, the drawee should pay by bill on the maturity date of the bill.

you can do the above except D/P at Sight. Others are risky (relative to L/C), but there are also customers who don't pay the redemption bill because of market price and other issues. If you want to do it, you can only be old customers with good reputation and long-term contacts.

D/P payment (that is, D/P payment) and D/A payment (that is, D/A payment) are seldom used. Mainly because these two payment methods belong to commercial credit, that is, whether the export company can receive the payment depends entirely on the importer's credit. Whether the importer can receive the goods in time, quality and quantity also depends on the credit of the exporter. For importers with good credit, there is generally no phenomenon of not paying for the goods, while importers with poor credit often default or refuse to pay for the goods. Therefore, these two payment methods are mostly used for importers and exporters with good reputation.

D/P risks are great, but if it is combined with T/T, it is a very good delivery method. Because in some countries, some companies like to use D/P. Then, for example, 31% T/T in advance, 41% after shipment, the balance D/P. This is safer than post-t/t.

O/A: open account trade (o/a), where the buyer and the seller agree that the seller will deliver the goods to the buyer first, and the buyer will pay within the agreed time. This is a payment method of trade credit, which depends entirely on the credit of buyers and sellers. It is mainly used for the payment of deposit, payment mantissa, commission and fees, and the risk of foreign exchange collection is very large. It is the biggest risk of foreign exchange collection among all kinds of settlement methods.

T/T payment by telegraphic transfer

T/T(Telegraphic Transfer) refers to a remittance method in which the remitting bank sends an additional telegram \ telex or SWIFT at the request of the remitter to instruct the branch or correspondent bank in another country to pay a certain amount to the payee.

(1) Under T/T mode, the importer does not need to apply to the bank for development.

(2) After completing the customs declaration and other formalities, the exporter will no longer deliver the documents to the bank by "documentary bill", but directly send the documents to the importer in the "Document List" page. 1v s/y1L#r& c.W& H

(3) The importer can go through the relevant formalities directly after receiving the documents, and then pay the importer after selling the goods to recover the funds.

(4) After the importer pays, the bank can notify the exporter to settle the foreign exchange.

TT is telegraphic transfer, L/C is letter of credit (revocable and irrevocable), and it can be divided into long-term and short-term.

TT usually calls a certain percentage of deposit, such as 31%. This can help enterprises to have a start-up fund for a project. However, in the case of LC, the receipt of foreign exchange is usually after delivery, and the documents of all parties have been obtained. When they are ready, they will go to the bank to pay the documents to press the foreign exchange.

T/T is a remittance settlement method in which the remitting bank sends a Tested Cable/Telex at the application of the remitter, or instructs the remitting bank abroad to remit a certain amount to the payee through SWIFT.

telegrams and telexes are used as settlement tools for telegrams and telexes, which are safe, rapid and expensive. Since the transmission direction of telegrams and telexes is the same as the flow direction of funds, telegrams and telexes belong to downstream remittance.

telegraphic transfer is a widely used remittance method at present, and its business process is as follows: firstly, the remitter telegraphs the application form and pays the money to the remitting bank, and then the remitting bank sends a telegram or telegram to the remitting bank, and the remitting bank telegraphs the notice to the payee, and the payee pays it in the bank after receiving the notice, and the bank cancels the payment. After the payment is completed, the remitting bank sends a debit notice to the remitting bank, and at the same time, the remitting bank sends a telegraphic transfer receipt to the remitter.

when telegraphic transfer is made, the remitter shall fill in the remittance application form, and indicate in the application form that T/T telegraphic transfer is adopted. At the same time, the remittance and the required expenses will be remitted to get the receipt of wire transfer. After receiving the remittance application form, the remitting bank should carefully examine the application form and contact the remitter in time in case of any mistake in the application form.

when the remitting bank handles the wire transfer, it sends the remittance instructions to the remitting bank by telegram or telex according to the contents of the remittance application. The contents of the message mainly include: remittance amount and currency, payee's name, address or account number, remitter's name, address, postscript, position allocation method, remitting bank's name or SWIFT address, etc. In order to make the remitting bank confirm that the contents of the message are indeed sent by the remitting bank, the remitting bank should add the Testkey agreed by both banks before the text.

after receiving the telegram or telex, the importing bank will check whether the cipher matches, and if it does not, it shall immediately draw up the telegram and inquire with the exporting bank. If it is in conformity, a telegraphic transfer notice will be prepared immediately to inform the payee to withdraw money. The payee draws money from the remitting bank in duplicate with the notice, and after the payee's receipt is signed, the remitting bank will pay the remittance accordingly. In practice, if the payee has an account with the remitting bank, the remitting bank often does not prepare a remittance notice, but only receives the money into the payee's account by telegram, and then gives the payee an account collection notice, and the payee does not need to sign a receipt. Finally, the remitting bank sends the Debit Advice to the remitting bank.

the telegraphic expenses in telegraphic transfer are borne by the remitter, and banks generally handle telegraphic transfer business on the same day, which does not occupy the remittance funds in the postal process. Therefore, telegraphic transfer is often used for remittance with a large amount or remittance through SWIFT or inter-bank transfer.

TT, although it has certain risks, is low in cost, and now it is very popular in the world's foreign trade payment methods.

There are several ways, such as TT before 1.111%, which is rare. If your guest gives you 111%TT when placing an order, then you are lucky. This guest should be an old guest or the amount is small to do so. Unless we are regular customers, we are too passive, and we may run out of money and goods at any time. Whether to pay or not depends entirely on the credit of the customer.

TT (as deposit) before 3.31% and TT after 71%, which is the most common.

Letter of Credit

Letter of Credit, L/C for short is a written guarantee issued by the issuing bank to the beneficiary (exporter) according to the requirements and applications of the applicant (importer) that a certain amount of money will be paid at the designated place within a certain period of time against the draft and export documents. Letter of credit is a payment promise made by the issuing bank to the beneficiary, which guarantees the beneficiary to receive payment, so it is a favorable payment method for the beneficiary. However, the beneficiary can only get the payment when he presents the documents required by the letter of credit according to the provisions of the letter of credit. Therefore, the letter of credit is a conditional payment commitment of the bank. Letters of credit are divided into clean letters of credit and documentary letters of credit. Documentary letter of credit refers to a letter of credit with specified documents, and a letter of credit without any documents is called a clean letter of credit. Simply put, a letter of credit is a guarantee document to ensure that the exporter can recover the payment. Please note that the time limit for shipment of export goods should be within the validity period of the letter of credit, and the time limit for presentation of documents in the letter of credit must be submitted no later than the validity date of the letter of credit.

Generally, opening a letter of credit to the outside world must go through the following steps:

(1) The buyer and the seller sign a formal sales contract for the traded goods, and indicate in the contract that the letter of credit is used for settlement;

(2) The importer shall fill in the application for opening the L/C according to the provisions of the contract, submit it to the local designated foreign exchange bank together with the copy of the contract and the "Record Form for Payment of Import Foreign Exchange" (if necessary), and deposit the funds to be paid externally under the L/C into the bank's margin account in full, and apply to the bank for opening the L/C externally;

(3) If you can only deposit part of the deposit, you can apply to the bank for a standby loan for the insufficient part; Sign a standby loan contract with the bank;

(4) The issuing bank will open a formal letter of credit according to the contents of the application, notify the exporter of the original letter of credit through a suitable foreign correspondent bank, and hand over a copy of the letter of credit to the importer;

(5) The bank charges the applicant a certain percentage of handling fee according to the amount and duration of the letter of credit.

although the letter of credit is a major payment method in international trade, it has no uniform format. However, its main contents are basically the same, including:

1. Description of the letter of credit itself: the type, nature, number, amount, date of issuance, validity period and expiration place, the name and address of the parties, whether the right to use this letter of credit can be transferred, etc.

2. Drawer, drawee, time limit and terms of issue of the draft;

3. Name, quality, specification, quantity, packaging, marks and numbers and unit price of the goods;

4. Requirements for transportation: time limit for shipment, port of shipment, port of destination, mode of transportation, whether freight should be prepaid, whether partial shipment and transshipment are possible, etc.

5. Requirements for documents: type, name, content and number of copies of documents;

6. Special terms: different provisions can be made according to the changes in the political, economic and trade situation of the importing country or the needs of each specific business;

7. Responsibility sentence of issuing bank to guarantee payment to beneficiary and bill holder

Letter of bank guarantee L/G

banker's letter of guarantee (L/G), also known as bank guarantee, bank guarantee, or short letter of guarantee, refers to a written certificate issued by the bank to the beneficiary at the request of the principal to ensure that the applicant will perform according to the regulations.

foreign trade collection

foreign trade collection is related to the normal operation of foreign trade transactions and the flexibility of smooth foreign trade capital flow. Some foreign trade customers choose the right ones, and the funds for foreign trade collection are very smooth; However, due to reasonable planning < P >, the payment for foreign trade transactions can not be returned, which affects the turnover of their own funds. There are different opinions about the advantages and disadvantages of various foreign trade collection methods in major foreign trade forums. Here I just talk about the selection methods of small foreign trade collection platforms from the experiences of many of my customers. <