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Methods of Payments

This document outlines the methods of payment, focusing on cash in letters of documentary open advance and credit collections. It emphasizes the roles of banks in facilitating transactions, providing advice, reviewing country information, and offering financing options. Through documentary collections, exporters benefit from retaining title to goods until payment or acceptance is secured. Additionally, banks mitigate risks associated with country and commercial factors, making this method advantageous for both exporters and importers in international trade.

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Methods of Payments

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  1. Methods of Payments Cash in Letter of Documentary Open Advance Credit Collections Account Most Advantageous to the Exporter Most Advantageous to the Importer

  2. DOCUMENTARY COLLECTION The handling by banks, on instructions received, of documents in order to: • Obtain acceptance and/or payment • Deliver commercial documents against acceptance and/or against payment • Deliver documents on other terms and conditions

  3. What is the Bank’s Role? • To provide advice • Review transactions, country information, business customs • To provide financing • Supporting sales, purchases and investments • To mitigate risk • Country Risk & Commercial Risk

  4. Documentary CollectionsAdvantages to the Exporter • Seller retains title to goods until payment or acceptance • Relies on banks to collect payment from buyer

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