Remittance
Also known as remittance, it is the most basic and common payment method in international settlement. This payment method is that the payer remits the money to the recipient’s account through a bank or other financial institution. The bank only provides remittance services similar to transfer service.
Therefore, remittance has no impact on the bank’s credit, and the transaction process of this payment method is completely agreed by the payee and the payer. Remittances are most commonly used in the settlement of loans from country to country, business to business, or affiliation settlements between various trades.
Collection
It refers to a settlement method in which the exporter delivers the valid draft to the bank in the exporting place after all the goods are shipped out, and then the bank collects the corresponding loan for the importer. Documentary collection and clean collection are the two most important. Collection mode, documentary collection means that the exporter delivers the goods according to the trade contract signed with the importer in advance, and then issues a bill of exchange or valid documents and entrusts it to the bank of the exporting place to collect the corresponding payment from the importer at the importing place. A single collection is also known as an undocumented collection.
Banks only provide services for the above two collection methods and do not involve credit. During the whole process, banks only look at valid financial instruments. Both parties need to reach an agreement on their own. Different trades have different risks of using collection to pay. There are certain risks involved in the collection of valid financial documents.
letter of credit
The main body of international trade is complex and changeable. The two parties to the trade will change with the changes of the economic market. In addition, the parties involved in the trade come from different countries and lack understanding and understanding of each other before. Trade credit has become the most severe test in international trade.
Based on the above situation, as early as the 17th century, the Western society invented the letter of credit. The letter of credit is mainly based on documents, and the bank credit is the basic method of international trade settlement. Strong support, a letter of credit is an effective written payment contract issued by a bank to the beneficiary according to the applicant’s request. The bank issuing the letter of credit must ensure the payment responsibility of the beneficiary. This payment method can effectively ensure the importation. economic security for both parties and exporters.
International factoring
It is the abbreviation of international guarantee agency business. It is a highly comprehensive financing and settlement method. This payment method has a short time of generation, but it develops very rapidly. Because many companies involved in international trade are reluctant to adopt overly complicated methods. Billing method.
Therefore, international factoring takes advantage of this feature to gain a favorable position by providing factoring for exporters and bearing the cost of factoring in the fiercely competitive international financial market. This payment method can bear the short-term business risks of both sides of the trade. , suitable for small and medium-sized foreign trade enterprises.
