Advance PaymentThe importer pays the cost of the goods in advance and the exporter ships the goods after the cost of the goods has been received or is paid before the goods are withdrawn from the customs. This payment method provides the importer with the highest risk of payment for the importer, but also allows the importer to get a discount by making the advance payment.Cash Against Goods (Open Account)It is the form of payment that the importer pays the cost of goods to the exporter after the goods are withdrawn from the customs.The importer has the possibility to pay in the long term by paying at the determined price in the sales agreement, as well as having the least risk since the payment is made after receipt of the goods.Cash Against DocumentsAfter the goods have been loaded by the exporter, the exporter's bank is to send the shipping documents representing the goods to the importer's bank by the delivery condition for the collection of the goods. The importer's bank does not deliver to the importer the documents necessary for importers to withdraw goods from customs without fulfilling payment terms.Documents Against AcceptanceIt is a form of payment that provides the ability to pay the cost of goods / bills to the importer. It also provides the opportunity to buy futures from abroad to the importer.In cases where the exporter does not know the importer well, the importer may require the bank to guarantee the payment. In this case, in addition to the acceptance of the importer, the bank is obliged to issue a draft / bond. In the avalized transactions, the documents are delivered to the buyer after avalizing the draft which is prepared by the exporter or the importer itself based on the request of the importer.
Letter of CreditLetter of Credit, which is one of the forms of payment in foreign trade, is a payment method which includes the payment undertaking by the importer's bank (applicant bank) upon the request of the importer (applicant) with the condition that the documents specified by the letter of credit are presented by the exporter (beneficiary).Types of Letter of Credit in Our Bank:• At Sight Payment L/C• Deferred Payment L/C• Acceptance L/C• Standby L/C• Mixed Payment L/C
Advantages for Seller (exporter)• When fulfilling the letter of credit conditions and providing documents (documents) in accordance with these conditions, the exporter has the irrevocable payment commitment of Applicant Bank and Confirming Bank ,if any, and shall protect himself against the risk of the importer not accepting or paying the goods.• It eliminates the risk of the importer canceling one-sided order.• Having the suitable financing opportunities for deferred transactions.Advantages for Buyer (importer)• The goods that the importer wants to buy are loaded in the amount and period specified in the letter of credit conditions.• The importer will have the full set of the documents required for customs withdrawal as specified in the letter of credit.• In case of violation of any of the conditions of the letter of credit, the obligation to pay ceases to exist.
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