Methods of Payments in International Trade

20+ minutes

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Three Payment methods

There are three payment methods in TF, namely Clean payments, DC and LC. Take a look at them.

Clean payments

A deeper look at the Clean Payments

Open account: goods in advance

Goods in Advance and Open Account - A detailed view

Documentary collections

Basic contracting happens between the two parties in trade. Find how money moves in this method of payment.

Relative Advantages and Disadvantages of Payments

Payment methods have advantages and disadvantages. Let us look at some of them.

LC - The overall flow

Letter of Credit fills in when both the parties cannot use the Clean payment methods

Documents in an LC

Documents evidencing the transaction are key in LC

Relative advantages and Disadvantages of the LC

Get to know the relative advantages and disadvantages of Letters of Credit

The role of Banks

Banks are involved in all stages of trade. Understand the role of Banks in each stage.