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INTERNATIONAL BANKING - International Banking Services
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For Exporters |
There are four primary methods of payment used by exporters. Each has pros and cons, but exporters reduce their risk as they move from an open account toward pre-payment, as explained below. For importers, the opposite is true. These are your options:
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Open Account - This method is usually the least desirable option for exporters, and is not advised when substantial sales are involved, or when parties are unfamiliar with each other's business practices. Parties should be familiar with each other, as the terms of payment are based primarily on trust. |
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| Documentary Collections - This method gives exporters more control than an open account. Exporters retain control of the merchandise while the bank transmits shipping documents to the importer's bank. Merchandise is released to the importer only when payment occurs as agreed. This method is used when the performance of both parties are well established. |
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Letters of Credit - This method ensures that the importer's obligation to act is in accordance with the agreed terms of the business contract. The exporter's risk is lower with the assurance of timely payment from the issuing bank when the terms are fulfilled. This method is used when the transactions of both parties are newly established. |
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Pre-payment - This is the most immediate and secure method of payment for an exporter, but is typically difficult to negotiate with importers. The importer pays in advance, before receiving the merchandise. |
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If you have any questions about International Banking Services for Exporters, please email us at info@eastwestbank.com. |
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Introducing East West Bank Student's Plus Program. If you are enrolled in an accredited university, city or vocational school, you are qualified to join our Student Plus Program and enjoy many great benefits.
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East West Business Equipment Leasing offers flexible and creative solutions to your company's equipment acquisition strategy. We offer business financing designed specifically for the needs of business customers. We help you get what you need when you need it -- at a cost that is in line with your budget.
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