General

We do foreign trade to make money. Therefore, receipt and payment is a very important link in import and export trade. Foreign trade newcomers are not familiar with payment methods. We will explain to you the 5 common payment methods for foreign trade for your reference.

1. T/T telegraphic transfer, TT has a front T/T and a back T/T, which are both commercial credit, easy to operate, and have no additional fees. In other words, it is equivalent to domestic bank transfers, just submitting the account number and transfer value. The difference is that domestic transfers are instant receipt, while overseas transfers require a period of time to wait.

Agent payment: Agent payment is applicable to individual SOHO and small and medium-sized enterprises. As there is no right to choose a payment method for import and export, this payment method can avoid risks. It is to find a large-scale comprehensive foreign trade enterprise and follow the national import and export process, as long as it is legal trade. It not only improves the ability to receive orders, but also maximizes profits. The advantage of doing this is that you are a foreign trade company, as long as the foreign trade company can do anything you can find them to act as an agent.

3. L/C Letter of Credit, also known as L/C, is divided into usance and sight. L/C refers to a written guarantee issued by the issuing bank to make payment within a specified time limit based on documents that meet the requirements of both parties. L/C letter of credit is relatively safe due to its bank guarantee, making it the most common foreign trade payment method in foreign trade.

4. D/A D/A: A method of payment in which the exporter issues ownership and other shipping documents to the exporter after the collecting bank has requested the collecting bank to accept the bill of exchange.

5. D/P documents against payment, which is a foreign trade payment method. When the exporter submits the remittance and shipping documents to the bank for collection, the bank is required to hand over the shipping documents only after the importer has paid the purchase price. According to the time of payment, it can be divided into D/P at sight and D/P at sight.

Each of these foreign trade payment methods has its own advantages. Some are convenient and fast, some are relatively safe, and some have low fees. Therefore, which foreign trade payment method to choose depends on your actual situation.