Payment Orders (money order or wire transfer): It is a funds transfer from the importer to the exporter. This procedure has no bank endorsement.
Collections: The banks perform the collection management of commercial and financial papers, with no further obligation other than complying with the instructions provided. The cost is lower and its operation is faster. If the importer fails to pay, the exporter cannot complain to the bank, as it is just an agent. It is used when a reliable business relationship is already in place.
Letters of Credit: Top security level in international sales. It guarantees the collection of the operation to the exporter. It has the payment guarantee of two or more banks, and the importer can be certain that the payment will be made only if its requirements are fulfilled. It is an order the importer gives to its bank to make the payment upon delivery of the exporter’s bank documentation certifying that the goods have been sent as agreed. |