What are the advantages of BPO (Bank payment Obligation) for importers?
Bank payment obligation (BPO) is the newest payment method in international trade. As of  24.June.2013 Uniform Rules for Bank Payment Obligation have been effective. URBPO is prepared by ICC. Like other payment methods in international trade, BPO offers some advantages and disadvantages to both exporters and importers. Today I would like to explain the advantages of BPO (Bank payment Obligation) for importers.




 
































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  • Do you want to learn more about Bank Payment Obligation? You can read my article "What is Bank Payment Obligation?" to learn more about this new payment method in international trade.
  • How does Bank Payment Obligation work?  I have given an example of bank payment obligation on this article. You will understand how Bank Payment Obligation works by reading this article.










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What are the advantages of BPO (Bank payment Obligation) for importers?
  • Bank payment obligation is more secure than advance payment because BPO is a conditional payment method. Under BPO transactions, banks send payment amount to exporters only after shipment of the goods, not before.
  • Issuing a bank payment obligation may prove that importer is a financially secure and strong company. 
  • Bank payment obligation is an irrevocable payment method like letters of credit. As a result importers can convince exporters to make shipments with BPO much more easily comparing to open account or documentary collections.
  • BPO facilitates financing of the shipment for the importers.
  • Importers can pay goods amount after they receive the shipment if exporters and importers agree on a term payment due such as "60 days after match", "90 days after match" etc.
  • BPO protects buyers against non-shipments, late shipments and inferior quality of goods shipments.  


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