How many payment methods are there in foreign trade? I mainly want to know: no down payment, payment and delivery, thank you!

There are three main payment methods for foreign trade export: letter of credit, telegraphic transfer and D/P. Among them, letter of credit is the most widely used, followed by telegraphic transfer, and D/P is less.

Let's first introduce l/c (Letter of Credit).

Letter of credit is the most commonly used payment method in international trade at present, and everyone who does foreign trade will come into contact with it sooner or later. For many people, when letter of credit is mentioned, it will be associated with a daunting red tape full of terms. In fact, a letter of credit can be said to be a sales contract guaranteed by a bank. As long as you provide the corresponding documents to the bank according to the terms of this contract, you must pay the money to you. Therefore, it should be said that letter of credit is a very safe payment method in theory. Once the letter of credit is opened, he is real money. Because of this, a reliable letter of credit can even be used as collateral to obtain loans from banks, which is convenient for the seller's capital turnover, that is, "letter of credit packaged loans." But in practice, letters of credit are sometimes not so safe. The reason is that there may be soft clauses in the letter of credit that are difficult for you to do, resulting in artificial inconsistency. The second common mode of delivery is telegraphic transfer (T/T). This method is very simple to operate, and can be divided into pre-t/t and post-t/t. The pre-T/T means to pay a part of the deposit, usually 30%, after the production is completed, notify the payment, pay off the balance, and then deliver the goods and deliver a full set of documents. But the former t/t is relatively rare, and it appears more in Europe and America. Because customers in Europe and America have a good reputation environment, he trusts others. The most common ones are post-telegraphic transfer, receiving deposit, arranging production and shipment, and paying the balance after the customer receives the copy of the document; After receiving the balance, the seller sends a full set of documents. The proportion of wire transfer deposit is an important content in negotiation and contract signing. The minimum margin ratio should be enough for you to send the goods out and then drag them back. In case the customer refuses to pay, the loss will not be great. Compared with l/c, t/t is very simple and flexible, such as tight delivery, changing packaging and so on. It doesn't matter as long as the customer agrees. If it is a letter of credit, it will be very troublesome. The letter of credit must be amended, otherwise it will cause discrepancies and the customer can refuse to pay. Another feature of telegraphic transfer is that the cost is lower than that of letter of credit, and the bank deduction is less, generally tens of dollars. Letters of credit sometimes cost hundreds of dollars. So some factories set the telegraphic transfer quotation lower than the letter of credit. However, generally speaking, if the documents are fully prepared and the collection is guaranteed by the bank, the letter of credit is more reliable than the telegraphic transfer. With a letter of credit, you can go to the bank to package loans, and the financial pressure is not great. But in countries with poor bank credit or strict foreign exchange control, letters of credit are very risky, such as India. T/T and L/C have their own advantages and disadvantages. If t/t and l/c are combined, they are quite safe, 30% T/T and the balance L/C. There are several less commonly used payment methods: d/p documents agai payment is a way to deliver documents under documentary collection, which means that the documents submitted by exporters are delivered by importers. D/P at sight means that the exporter draws a draft at sight, and the collecting bank reminds the importer that the importer must pay after seeing the bill. After payment, the importer gets the shipping documents. D/P after sight or date refers to the time draft drawn by the exporter and presented to the importer by the collecting bank. After being accepted by the importer, the importer pays the redemption bill on or before the maturity date of the bill. D/A is a way for exporters (or collecting banks) to deliver documents to importers on the condition of acceptance under documentary collection. The so-called "acceptance" refers to the payer's (importer's) approval of the draft when the collecting bank presents it. The procedure of acceptance is that the payer signs the bill, indicating the word "acceptance" and the date, and returns the bill to the holder. No matter how many times the bill is transferred, the drawee should pay by the bill on the maturity date. All the above are acceptable except D/P at sight. Others are risky (relative to l/c), but some customers don't pay the redemption order because of market price and other problems. If they want to do it, they can only be old customers with good reputation and long-term contact. D/p payment and d/a payment are rarely used. Mainly because these two payment methods belong to commercial credit, that is, whether the export company can receive the payment depends entirely on the importer's credit. Whether the importer can receive the goods on time, in good quality and in good quantity depends on the credit of the exporter. For importers with good credit, there is generally no phenomenon of non-payment for goods, while importers with poor credit often default or refuse to pay for goods. Therefore, these two payment methods are mostly used by reputable importers and exporters. D/P is risky, but it is a very good delivery method if it is combined with telegraphic transfer. Because in some countries, some companies like to pay by D/P. Then, for example, 30% T/T in advance, 40% after shipment, and D/P for the balance. This is safer than wire transfer afterwards.

Settlement method: letter of credit settlement method, remittance and collection settlement method, bank guarantee and the combination of various settlement methods.

A. letter of credit settlement letter of credit (L/C) is the product of bank credit participating in the settlement of international sales price of goods. Its appearance not only solved the contradiction of mutual distrust between buyers and sellers to a certain extent, but also made it convenient for both parties to obtain bank financing in the process of settlement of payment by letter of credit, thus promoting the development of international trade. Therefore, it is widely used in international trade, so that it has become a major settlement method in international trade today. A letter of credit is a conditional payment commitment made by a bank, that is, a written document issued by a bank to the beneficiary with a certain amount and provisions according to the applicant's requirements and instructions, promising to pay within a certain period of time; Or a guarantee that the bank is willing to underwrite the beneficiary's draft on behalf of the applicant under the specified amount, date and documentary conditions. It belongs to bank credit and adopts reverse exchange method.

B. remittance and collection settlement methods remittance and collection are commonly used payment and settlement methods in international trade.

C. Bank guarantee (L/G), also known as bank guarantee, bank guarantee or short letter of guarantee, refers to the written certificate issued by the bank to the beneficiary at the request of the customer to ensure that the applicant performs the contract according to the regulations, otherwise the bank will be responsible for repayment.

D. Combination of multiple settlement methods In international trade business, only one settlement method can be used for the payment of a transaction (usually), and two or more settlement methods can also be combined as needed, such as different trading commodities, different trading objects and different trading practices, which is conducive to facilitating transactions, collecting foreign exchange safely and timely, or properly handling foreign exchange payments. Common settlement methods include: combining letter of credit with remittance, combining letter of credit with collection, and combining remittance with bank guarantee or letter of credit.

telegraphic transfer

T/T is a remittance settlement method in which the remitting bank sends a tested telegram/telex at the application of the remitter, or instructs the overseas remitting bank to remit a certain amount to the payee through SWIFT.

Telegraph and telex are safe, fast and expensive as settlement tools. Because the transmission direction of telegrams and telex is the same as the flow of funds, telegraphic transfer belongs to downstream remittance.

Telegraphic transfer is a widely used remittance method at present. Its business process is as follows: first, the remitter applies for wire transfer and pays the remittance to the remitting bank, then the remitting bank sends a telegram or telegram to the remitting bank, and the remitting bank sends a wire transfer notice to the payee. After receiving the notice, the payee pays at the bank, and the bank cancels the payment. After the payment is completed, the remittance bank sends a deduction notice to the remittance bank, and at the same time, the remittance bank sends a remittance receipt to the remitter.

When telegraphic transfer, the remitter should fill in the remittance application form, and indicate the telegraphic transfer method in the application form. At the same time, the remittance and the required expenses will be remitted to obtain a wire transfer receipt. After receiving the remittance application, the remittance bank should carefully examine the application and contact the remitter in time if there are any mistakes.

When handling telegraphic transfer, the remitting bank sends remittance instructions to the remitting bank by telegram or telex according to the contents of the remittance application. The contents of the message mainly include: remittance amount and currency, payee's name, address or account number, remitter's name, address, postscript, position allocation method, remitter's name or SWIFT address, etc. In order for the remitting bank to confirm that the contents of the message are indeed sent by the remitting bank, the remitting bank should add the mutually agreed Testkey before the text.

After receiving the telegram or telex, the remitting bank should check whether the password is consistent. If it is not, it should immediately draw up a telegram to inquire with the remitting bank. If so, a wire transfer notice will be prepared immediately to inform the payee to withdraw money. The payee draws money from the remittance bank with the notice in duplicate. After the payee signs for it, the remittance bank pays the remittance accordingly. In practice, if the payee has an account in the remittance bank, the remittance bank often does not prepare remittance notice, but only receives the money into the payee's account by telegram, and then gives the payee a receipt notice, and the payee does not need to sign the receipt. Finally, the remittance bank sends the debit notice to the remittance bank.

The telegraphic transfer expenses in telegraphic transfer shall be borne by the remitter, and banks generally handle telegraphic transfer business on the same day, which does not occupy the remittance funds in the postal process. Therefore, telegraphic transfer is often used for large remittance or remittance through SWIFT or inter-bank transfer.

Although TT has certain risks, its cost is low and it is very popular in international foreign trade payment.

* * * There are several ways.

TT is before 1. 100%, which is very rare. If your guest gives you 100% TT when placing an order, then you are lucky. This guest should be an old guest or a small amount.

2. TT after100%, which is risky. Unless you are an old guest, you will be too passive. We may be out of money at any time, and whether we pay or not depends on the credit of our guests.

3.30% TT (as deposit) and 70% TT, see bill of lading for payment, which is the most common.

letter of credit (L/C)

letter of credit (L/C)

A letter of credit (L/C for short) is a written guarantee that the issuing bank will open a certain amount to the beneficiary (exporter) according to the requirements and applications of the applicant (importer) and pay at the designated place with the draft and export documents within a certain period of time. Letter of credit is a payment promise made by the issuing bank to the beneficiary to ensure that the beneficiary receives the payment, so it is a favorable payment method for the beneficiary. However, the beneficiary can only get the payment if he provides the documents required by the letter of credit according to the provisions of the letter of credit. Therefore, the letter of credit is a conditional payment commitment of the bank.

Opening a letter of credit generally requires the following links:

(1) The buyer and the seller sign a formal sales contract for the traded goods, and indicate in the contract that the settlement will be made by letter of credit;

(2) The importer shall fill in the Application Form for Opening a Letter of Credit as required by the contract, submit it to the local designated foreign exchange bank together with the copy of the contract and the Record Form for Import Payment of Foreign Exchange (if necessary), deposit the foreign payment funds under the letter of credit in full into the bank margin account, and apply to the bank for opening a letter of credit;

(3) If you can only deposit part of the deposit, you can apply for a standby loan from the bank for the insufficient part; Sign a standby loan contract with the bank;

(4) The issuing bank shall open a formal letter of credit according to the contents of the application, notify the exporter of the original letter of credit through a suitable foreign correspondent bank, and hand over a copy of the letter of credit to the importer;

(5) The bank charges the applicant a certain percentage of handling fee according to the amount and duration of the letter of credit.

Although letter of credit is a major payment method in international trade, it has no uniform format. However, its main contents are basically the same, including:

1. Description of the letter of credit itself: the type, nature, serial number, amount, date of issuance, period of validity and place of expiration, name and address of the parties, whether the right to use this letter of credit can be transferred, etc.

2. The drawer, payer, term and terms of the bill of exchange;

3. Name, quality, specification, quantity, package, mark, number and unit price of the goods;

4. Transportation requirements: time limit for shipment, port of shipment, port of destination, mode of transportation, whether prepaid freight is required, whether partial shipment and transshipment are possible, etc.

5. Requirements for documents: type, name, content and number of copies of documents;

6. Special terms: different provisions can be made according to the changes in the political, economic and trade situation of the importing country or the needs of various specific businesses;

7. The responsibility of the issuing bank to guarantee payment to the beneficiary and the holder of the draft.

I hope it helps.