The common methods for export foreign trade agents to receive payment are as follows:
The first is telegraphic transfer (T/T), which is divided into pre-T/T and post-T/T. Pre-T/T means the customer pays off the payment before shipping, which poses low risks to the agent; post-T/T means payment is made after shipping, with relatively high risks. The advantages are fast speed and simple operation; the disadvantage is that there is a risk of not being able to recover the payment in post-T/T. To prevent risks, the agent can require the customer to provide a certain amount of advance payment or investigate the customer's credit situation.
The second is letter of credit (L/C). With bank credit as guarantee, the bank will make payment as long as the documents are in compliance, and the risks are relatively controllable. The advantage is relatively high safety, while the disadvantage is complex operation and high cost. It is necessary to prepare documents strictly in accordance with the requirements of the L/C to avoid rejection of payment due to discrepancies.
The third is collection, which is divided into documents against payment (D/P) and documents against acceptance (D/A). D/P is relatively safe, as the customer can only obtain the documents and pick up the goods after payment; D/A has high risks, as the customer can obtain the documents and pick up the goods after acceptance, and there may be a situation of losing both the goods and the payment. Be cautious when choosing the collection method, especially D/A.
Professional consultant answers
Andrew HuangYears of service:7Customer Rating:5.0
Supply chain optimization expertConsult
The common methods for export foreign trade agents to receive payment are as follows:
The first is telegraphic transfer (T/T), which is divided into pre-T/T and post-T/T. Pre-T/T means the customer pays off the payment before shipping, which poses low risks to the agent; post-T/T means payment is made after shipping, with relatively high risks. The advantages are fast speed and simple operation; the disadvantage is that there is a risk of not being able to recover the payment in post-T/T. To prevent risks, the agent can require the customer to provide a certain amount of advance payment or investigate the customer's credit situation.
The second is letter of credit (L/C). With bank credit as guarantee, the bank will make payment as long as the documents are in compliance, and the risks are relatively controllable. The advantage is relatively high safety, while the disadvantage is complex operation and high cost. It is necessary to prepare documents strictly in accordance with the requirements of the L/C to avoid rejection of payment due to discrepancies.
The third is collection, which is divided into documents against payment (D/P) and documents against acceptance (D/A). D/P is relatively safe, as the customer can only obtain the documents and pick up the goods after payment; D/A has high risks, as the customer can obtain the documents and pick up the goods after acceptance, and there may be a situation of losing both the goods and the payment. Be cautious when choosing the collection method, especially D/A.
Robert ChenYears of service:6Customer Rating:5.0
Customer service consultantConsult
Western Union can also be used to receive payment. It is fast, usually arriving within 3 working days. There is no need to open a bank account, just provide the payment receipt information. However, the handling fee is relatively high, and there are certain restrictions on the amount, which is not very suitable for large - amount collections. It is suitable for small - amount and urgent collection situations.
Jennifer WangYears of service:4Customer Rating:5.0
Market development consultantConsult
PayPal is also a common payment collection method. It is convenient, fast, and globally used. It provides strong protection for buyers. If the buyer initiates a dispute, the funds may be frozen. When receiving payment, pay attention to the trading rules to avoid account restrictions due to illegal operations. At the same time, the handling fee is not low, and there may be additional fees for withdrawing to a domestic bank account.
Michelle ChenYears of service:3Customer Rating:5.0
Business coordination consultantConsult
Using Alipay International (Escrow) to receive payment is similar to the guaranteed transaction mode of domestic Alipay. After the buyer makes the payment, the funds are first held by the platform. After the seller ships the goods and the buyer confirms receipt, the platform transfers the funds to the seller. It provides protection for both the buyer and the seller, but the platform will charge a certain percentage of handling fees.
Amanda YangYears of service:3Customer Rating:5.0
Cost control consultantConsult
Payment can also be received by open account (O/A), that is, ship the goods first and then receive payment within the agreed time. This is beneficial to the buyer, but poses extremely high risks to the agent. If the buyer has poor credit or poor business operation, it is very likely that the payment cannot be recovered. It is not recommended to use this method unless dealing with long - term cooperative customers with good credit.
Joseph ZhouYears of service:10Customer Rating:5.0
Senior foreign trade managerConsult
Payment can be received by bills, such as drafts and promissory notes. A draft can be issued by the payer or the payee and becomes effective after acceptance by the payer. A promissory note is paid by the drawer himself. There may be risks such as loss and forgery during the circulation of bills. When accepting bills, strictly review the authenticity and validity of the bills.
James LiuYears of service:10Customer Rating:5.0
Foreign trade tax refund consultantConsult
Receiving payment by bank guarantee means that the bank issues a written guarantee to the beneficiary at the request of the applicant. If the applicant fails to fulfill the obligation as agreed, the bank will pay the amount to the beneficiary as agreed in the guarantee. However, the procedures for handling a bank guarantee are rather complicated. The bank will conduct a strict review of the applicant and require a certain amount of deposit to be paid.
Elizabeth LiYears of service:3Customer Rating:5.0
Compliance and risk managerConsult
For some long - term and stable cooperative customers, a regular settlement mechanism can also be considered. Both parties agree on the settlement cycle, such as settling once a month or once a quarter. This can simplify the payment collection process, but the premise is to have sufficient confidence in the customer's credit and sign a detailed contract to clarify the settlement terms.
William YangYears of service:5Customer Rating:5.0
International logistics consultantConsult
Mobile payment is also gradually emerging internationally, such as some mobile wallets that support cross - border payments. However, its popularity is not as high as traditional methods at present, and its use is restricted in some countries and regions. Moreover, there are issues such as exchange rate conversion and payment security. Comprehensive consideration should be given when choosing.