General

We offer you the most complete payment method for foreign trade! For a foreign trade order that is about to be concluded, there are two things that we are most concerned about.

The first is the transaction price, which basically determines how much profit the order can bring; Next is the foreign trade payment method. In addition to determining whether the order can be collected safely, the foreign trade payment method also has another role in determining whether it can bring the expected positive cash flow. Today, let's share some common payment methods for foreign trade. Remember to collect them for standby!

Payments are distinguished from the received accounts:

1. Corporate accounts: T/T, L/C, D/P, D/A, O/A

2. Private accounts: Western Union Remittance, Paypal, Express Remittance

T/T

T/T payment is settled in foreign exchange cash, and your customer will remit the money to the foreign exchange bank account designated by your company. It belongs to commercial credit. After the goods are ready, if the customer pays the full payment, you can send the documents directly to the customer without going through the bank.

T/T telegraphic transfer is divided into two types, one is called pre-TT (pre-T/T), and the other is post-TT (post-T/T).

Former TT (former T/T), in short, in the international trade industry, those who pay 100% of the payment before the consignor delivers goods are called former TT (former T/T).

This method of payment is the safest way of trade in international trade, compared with the seller, because the seller does not need to bear any risk, as long as it receives the money, it will ship, and will not ship without receiving the money.

The former TT can also be divided into many flexible ways, first 20%~40% deposit, and then 80%~60% before delivery. The specific proportion is flexible according to different situations.

The post-TT payment method is defined in the line as the buyer pays off the balance after the delivery. Generally, the latter TT will pay the balance according to the copy of B/L bill of lading.

The post-TT mode is also relatively flexible. In general, the international post-TT payment method is generally popular. The customer pays 30% deposit first, and the other 70% is the customer pays the balance at the sight of the copy of the bill of lading. Of course, some are 40% deposit and 60% see bill of lading.

Frequently asked questions about T/T payment

1. The wrong information of the payee leads to the suspension of the account.

Many customers are careless and will write the name of the payee wrong, such as the wrong words, such as the name is too long, and the remittance is limited by the filling space. The remittance did reach the payee's account, but because of the wrong information, there is no way to unfreeze the payment.

Processing result: Generally, if it is not solved on the 15th (or according to the actual situation of each bank), it will be returned by the original way.

terms of settlement:

① Inform the customer to change the information, and clearly inform the customer that we cannot collect money without changing the information, and the order cannot be executed.

② If the company name is too long after the second cooperation, you can tell the customer to write down the part of the name in the address column, and you can also collect money smoothly.

2. Late T/T customers defaulted on the balance.

Some customers are quite tardy and delay in payment. First of all, when signing the contract, clearly indicate the time of payment of the balance payment, such as payment within 3-5 working days after seeing the copy of the bill of lading, to avoid the situation that the balance payment is not received. Of course, to avoid this situation, we need to analyze and study customers, and it is best to avoid risks in advance.

L/C

Letter of Credit (L/C) is a written document issued by a bank that promises to pay conditionally.

In international trade activities, the buyer and the seller may not trust each other, and the buyer is worried that after the advance payment, the seller does not deliver goods according to the contract requirements; The seller is also concerned that the buyer will not pay after delivery or submission of shipping documents.

Therefore, two banks are required to act as the guarantors of the buyer and the seller, collect and deliver documents on behalf of them, and replace commercial credit with bank credit (bank credit is higher than commercial credit). The tools used by banks in this activity are letters of credit.

It can be seen that the letter of credit is the certificate that the bank guarantees payment conditionally, and has become a common settlement method in international trade activities.

According to the general provisions of this settlement method, the buyer shall first deposit the payment for the goods in the bank, and the bank shall open a letter of credit, notify the seller's bank of deposit in the other place to inform the seller, and the seller shall deliver the goods according to the terms specified in the contract and the letter of credit, and the bank shall make payment on behalf of the buyer.

Three distinct characteristics of letter of credit

1. A letter of credit is a self-contained document. The letter of credit is not attached to the sales contract, and the bank emphasizes the written certification of the separation of the letter of credit and the basic trade when reviewing the documents.

2. The L/C method is pure document business. The letter of credit is payable against documents, not subject to the goods. The issuing bank shall make payment unconditionally as long as the documents are consistent.

3. The issuing bank is primarily responsible for payment. Letter of credit is a kind of bank credit. It is a guarantee document of the bank. The issuing bank has the primary responsibility for payment.

Process of letter of credit

(1) The applicant shall fill in the letter of application and pay the deposit or provide other guarantees according to the contract, and ask the issuing bank to open the letter of credit.

(2) The issuing bank shall issue a letter of credit to the beneficiary according to the contents of the application and send it to the advising bank at the exporter's location.

(3) The advising bank shall deliver the L/C to the beneficiary after checking the seal.

(4) After verifying that the contents of the letter of credit are in conformity with the contract provisions, the beneficiary shall ship the goods, prepare the documents and draw a draft according to the provisions of the letter of credit, and send it to the negotiating bank for negotiation within the validity of the letter of credit.

(5) The negotiating bank shall advance the payment to the beneficiary after checking the documents according to the terms of the letter of credit.

(6) The negotiating bank shall send the draft and shipping documents to the issuing bank or its specific paying bank for claim.

(7) The issuing bank shall make payment to the negotiating bank after checking the documents.

(8) The issuing bank informs the issuing party to pay the redemption order.

Common countries with large amounts that must be paid by LC: Bangladesh, Ethiopia, Algeria, Uzbekistan, etc.

D/P

D/P refers to a settlement method in which the collecting bank can deliver the commercial (freight) documents to the importer only after the importer has paid the goods.

The presentation at sight indicates that the exporter issues a sight draft, and the collecting bank will prompt the importer to make payment upon sight. When the payment is paid, the importer will obtain the shipping documents.

The usance delivery refers to that the exporter issues a usance bill, and the collecting bank will prompt the importer to pay for the bill after the importer accepts the bill or before the due date of the bill.

Existing risks:

In D/P business, the bank does not review the contents of the document, and the bank does not assume the payment obligation. The bank only provides services such as transferring documents, presenting documents on behalf of the bank, and collecting and transferring funds on behalf of the bank.

In D/P export business, exporters should pay attention to the following important issues:

1. In D/P business, the guarantee for the exporter to obtain payment for goods is the credit of the importer, so paying attention to the payment ability and commercial reputation of the importer is an important prerequisite for obtaining payment.

2. After the delivery of the goods, during the circulation of documents from the exporter to the importer, attention should be paid to the control of the goods through the control of the documents. Before the importer pays, the documents should be firmly controlled.

3. In practice, problems often occur at the transfer and handover points of documents, that is, the handover point from the exporter to the bank, from the seller's bank to the buyer's bank, and from the buyer's bank to the importer. Therefore, these handover points need to be well controlled, and the documents should be circulated according to specifications.

4. Try to use the order bill of lading. In this way, the goods can be controlled by controlling the bill of lading.

D/A

Document against acceptance (D/A) means that the exporter's presentation is conditional on the importer's acceptance on the bill of exchange. That is, the exporter issues a usance bill after shipping the goods, together with the commercial documents, and prompts the importer through the bank. After the importer accepts the bill, the collecting bank will deliver the commercial documents to the importer, and the payment obligation will be performed only when the bill expires.

As D/A means that the importer can obtain the commercial documents to take delivery of the goods as long as he accepts the bill of exchange. Therefore, the method of D/A is only applicable to the collection of usance bills.

D/A is a common method of payment in international trade. The exporter instructs the collecting bank through the collecting bank to issue the ownership and other shipping documents to the importer after the importer accepts the bill of exchange. The exporter will face the risk that the importer will not pay the bill on time.

The so-called "acceptance" refers to the acceptance of the bill of exchange when the drawee (importer) presents the usance bill to the collecting bank. The procedure of acceptance is that the drawee signs the bill of exchange, signs 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 shall pay against the bill on its maturity date.

western union

Western Union Remittance is a leading express remittance company in the world, and a subsidiary of the First Data Corporation (FDC), one of the Fortune 500 companies in the United States. It has a history of 150 years. It has the largest and most advanced electronic remittance financial network in the world, and its agency outlets are distributed in nearly 200 countries and regions around the world.

For small private remittance, Western Union remittance is preferred. You only need to tell the customer your name and nationality to make payment. Remember the order of surname and first name:

The Chinese GIVEN NAME is the first name and the first name. The Chinese FAMILY NAME is the last name. Tell the customer not to write it backwards. After the customer pays, there will be a payment voucher, which is often called a water slip. There is an important information MTCN number on it, called the monitoring number. With this number, you can conduct the collection operation on the above bank counter or network.

The service charge for Western Union remittance is paid by the payer. Therefore, the cost of collection is zero.

PayPal

PayPal is a wholly-owned subsidiary of American eBay Company. Transferring funds between users who use e-mail to identify their identities avoids the traditional method of mailing checks or remittances.

PayPal also cooperates with some e-commerce websites to become one of their payment methods. However, when using this payment method to transfer money, PayPal charges a certain amount of handling fee.

Payment process:

When the payer wants to pay a sum of money to the merchant or payee through PayPal, it can be divided into the following steps:

1. As long as there is an e-mail address, the payer can log in and open a PayPal account, become its user through authentication, provide credit card or relevant bank information, increase the account amount, and transfer a certain amount of money from the account registered at the time of opening the account (such as credit card) to the PayPal account.

2. When the payer starts the payment procedure to a third party, he/she must first enter the PayPal account, specify a specific amount of remittance, and provide the payee's e-mail account to PayPal.

3. Then PayPal sends an email to the merchant or payee, informing them that there is money waiting to be collected or transferred.

4. If the merchant or payee is also a PayPal user, the payment specified by the payer will be transferred to the payee after the merchant or payee decides to accept it.

5. If the merchant or payee does not have a PayPal account, the payee has to register and obtain a PayPal account on the website according to the instructions of PayPal email content. The payee can choose to convert the obtained amount into a check and send it to the designated place, transfer it to his personal credit card account or transfer it to another bank account.

PayPal is a service fee paid by the collecting party. The service fee is composed of a certain proportion and service fee. For details, please consult the special PayPal provider.

The disadvantage is that if the customer pays by credit card, even if you receive the payment, Paypal can still recover it from you. Paypal charges a high fee and can flexibly arrange according to the actual situation of the company and individuals.

MoneyGram 

Express remittance is a kind of global fast remittance business between individuals, which can complete the remittance process from remitter to payee in more than ten minutes, and has the characteristics of fast and convenient. Express remittance is a remittance institution similar to Western Union.

The remitter does not need to choose a complex remittance path, and the payee does not need to open a bank account first to realize fund transfer.

If RMB is drawn in US dollars, this business is the settlement of foreign exchange. For the settlement of foreign exchange of any matter, whether domestic or overseas individuals, each person can settle the equivalent of 50000 US dollars (including) each year with his/her valid ID card. That is, the amount of single foreign exchange settlement is no longer limited, as long as it does not exceed the equivalent of 50000 US dollars in the current year.

So when your customer tells you that you have remitted a MONEY GRAM to you, you only need to ask your customer for: remittance password, eight digits; Name of remitter; Last name of the remitter.

Then go to the local branch of the relevant local cooperative bank where there is a special MONEY GRAM counter. They will give you a receipt form, fill in the relevant information of the customer and yourself, and bring your own ID card to get the money.

It is also the most comprehensive payment method for foreign trade!