International means of paymentYou did an export or import of goods, or services, and you must pay or be paid. You can choose between many types of settlement. They all present several levels of constraint and reliability for the buyer and the seller. Therefore, it supposes a permanent arbitration between safety, simplicity, and quickness in execution.
Choice of the way of payment
Check
The regulation in this field is different in foreign states, so we advise you to avoid this way of payment. Also, avoid the payment by bank check.International Credit Transfer
The SWIFT transfer is the fastest and less expensive way. It relies on the SWIFT electronic interbank network, with which several thousand banks in world are commuted.Cash on delivery
The bill of exchange
As for check, you must ask for information about the national regulations for this way of payment, regulations that are often different from French regulation. To present a better guarantee, a bank must endorse the bill of exchange.The documentary delivery
For this type of payment, the exporter entrust to his bank the commercial and financial documents, and gives a mandate to deliver these documents to the buyer with, in return, a payment in full, or the commitment to pay at a settlement date.
It offers the advantage to be a simple system, but it does not constitute a guarantee of payment, so you must have confidence in your buyer.The documentary credit
It's a written commitment made by the bank at your request or your buyer's request when you sell for import, to pay a determined amount in return of the delivery, in a time limit, of the documents as planned at the opening of the documentary credit.
The main differences between documentary delivery and documentary credit lies in the fact that documentary delivery doesn't include any commitment of payment from one or several banks.Four participants play a part in documentary credit
:
- The buyer, or principal,
- The transmitting bank, bank of the buyer,
- The notifying bank, bank of the seller,
- The seller, the beneficiaryThis technique holds a great place in international settlements. It offers best security and is governed by the same rules in all states, rules that are specified in the booklet number 500 of the International Chamber of Commerce, and applicable since 1st January 1994.
Main types of documentary credit :
- The revocable documentary credit entitles the transmitting bank to modify or invalidate it without the agreement of the beneficiary. It is not a very used way.
- The irrevocable documentary credit comprises a firm commitment give in favor of the seller by the transmitting bank acting by order of the buyer to execute the payment subject to the delivery of true documents. It cannot be invalidated or modified without the agreement of all interested parties.
- The irrevocable and confirmed documentary credit adds the commitment of your bank to the commitment of the transmitting bank.Different methods of achievement of documentary credit :
- By sight payment: the transmitting bank pays regular documents as soon as they are presented.
- By deferred payment: in this case, the transmitting bank pays the true documents within a time limit (for example 90 days). This time limit is not materialized by a draft but the buyer has at his disposal the payment commitment of transmitting bank and possibly of notifying bank.
- By acceptance: it is a deferred payment with exchange issue either on the transmitting bank, or the notifying bank, or another bank. The beneficiary may ask for discount issue from his bank.
- By negotiation: it entitles the advance payment by the bank, which negotiate the documents. Transmitting bank, on receipt of documents, will pay the negotiating bank.Special documentary credits :
- The revolving documentary credit entitles, in case of regular business movement, automatic renewal into prior negotiated conditions.
- The transferable documentary credit may be partially or totally transferred in favor of one or several secondary beneficiary, real providers of goods.
- The back-to-back documentary credit is a substitute to transferable documentary credit, if this mode is impossible. A second documentary credit will be issued, on exporter demand, in favor of the provider.To learn more about the documentary credit, we invite you to consult the export tip dedicated to this subject.
The payment by banker's order of settlements
If you have recurrent business movements with one or several commercial partners in the same country, you may have recourse to a centralizing account.
This procedure is simple: you open a bank account, in a bank of the concerned country, in the name of your society. The settlements of your buyers will be registered on this account. You will periodically bring back the collected sums to your account in your countryFor any question on this topic, do not hesitate to contact Banque Libano-Française.