Payment Methods in International Trade
There are 5 types of payment methods available in international trade.
These payment types are cash-in-advance, open account, documentary collections, documentary credits (letters of credit)...
How to Check a Letter of Credit as an Exporter?
Documentary letters of credit are internationally recognized instruments that help ensure the creditworthiness and payment of the overseas parties you’re trading with.
Letter of credit...
Documentary Collections – Cash Against Documents (CAD)
Documentary collection (D/C) is a payment method in international trade.
Documentary collection is also known as Cash Against Documents (CAD) by most exporters and importers.
Documentary...
What is a Transferable Letter of Credit?
Transferable letters of credit are a tool used by trading companies, or other third parties, to facilitate a trade transaction. (1)
Transferable letters of credit...
Swift Messages in Letters of Credit
SWIFT is the short form of "Society for Worldwide Interbank Financial Telecommunication".
Swift defines its role in international financial transactions on its website as follows.
“Our...
UCP 600
What is UCP 600?
UCP 600 is the latest version of the rules that govern letters of credit transactions worldwide.
UCP 600 is prepared by International...
Proforma Invoice
In international trade, a proforma invoice means a trade document that states a commitment from the seller (exporter) to sell goods to the buyer...
Confirmation and Confirmed Letter of Credit
When an irrevocable letter of credit is issued, the risk of payment rests with the issuing bank. This type of letter of credit is defined...
Advantages and Disadvantages of Letters of Credit
Letter of credit is one of the payment methods in international trade. Just like other payment methods it has certain advantages and disadvantages.
Advantages of...
Nominated Bank
Nominated bank is another important yet not well understood term in international letter of credit transactions.
May be the biggest contribution of this lack of...
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