Payment Methods in a Trade Transaction

Advance Payment

• Receive payment from your buyer before you ship the goods
• This is the most secure payment method for an exporter
• It is not a common payment method and is usually limited to those situations when a buyer cannot supply any evidence of their ability to pay a new business

Letter of Credit

• To balance the risks to both buyer and seller, your may ask your buyer to apply for a Letter of Credit for each transaction. A Letter of Credit is a more secure form of payment and you will receive payment if you comply with all the terms and conditions of the Letter of Credit.
• As soon as you receive the Letter of Credit you should check that it matches the underlying commercial agreement and that you can comply with all the terms and conditions.

Documentary Collection

• Documentary Collections offer SOME protection to you and they are widely used to give protection against the risk of the buyer not paying
• Work with Standard Chartered and have us handle your export collections. Talk to us to find out more.

Open Account

• Send the goods to your buyer and receive payment at a later date based on the trade terms and agreement with your buyer
• This payment method is best suited to situations where there is an existing successful trading relationship in place
• You are open to the risk that the buyer does not pay you for the goods you supplied