Trade exports are inseparable from the collection of foreign exchange. I believe everyone knows the common international settlement methods. We can collect foreign exchange through domestic accounts and overseas accounts. But what are the differences in foreign exchange collection in different regions?
What are the main methods of international settlement?
1. Letter of Credit L / C
    It refers to a written voucher issued by the bank to the exporter (seller) that guarantees the responsibility for payment of the goods at the request of the importer (buyer). In the letter of credit, the bank authorizes the exporter to use the bank or its designated bank as the payer under the conditions stipulated in the letter of credit, to issue a bill of exchange that cannot exceed the specified amount, and to attach the shipping documents as specified in the specified period Collect payment at the location.
Second, wire transfer T / T
Telegraphic transfer is a method of payment where the payer deposits a certain amount of money with the remittance bank. The remittance bank sends the telegram or telephone to the branch or agency (remittance bank) of the destination, instructing the remittance bank to pay a certain amount to the payee .
3. Payment D / P
    It refers to a settlement method in which the receiving bank must pay the goods before the importer can pay the commercial (freight) documents to the importer.
See the details of the risks of various payment methods here:
1. 100% T / T advance
100% payment to production. Note that this is payment to production, but not a payment to delivery. This payment method means that the full payment is received before production begins. Of course, the exporter is a payment method with zero risk, but the same method is the biggest risk for the importer. Generally, this payment method is only used for sample orders or small orders.
Second, T / T deposit + T / T balance payment before delivery
This payment method is also very safe. And the higher the deposit ratio, the higher the safety factor. Of course, there are some extreme situations here. After the customer has paid the deposit, the product has been abandoned or closed down. This probability is very, very small.
As long as there is no delivery, if the deposit is received and the customer abandons the goods, it can be resold to other customers or reduced in price. There are many coping options. However, I have also encountered the situation of not paying for goods. There was an Argentine customer who paid thousands of dollars to place an order. After the money was paid, he said that he should not do it before production.
3. T / T deposit + final letter of credit
Generally speaking, it is 30% T / T, 70% of the letter of credit. Of course, the higher the T / T ratio, the better. In fact, this payment method is almost as safe as the second payment method. It is also a very secure payment method.
The difference is that with this payment method, the bill of lading can only be paid after shipping and getting the bill of lading. The biggest risk of receiving credit is that the customer refuses to pay after the discrepancy. After receiving the T / T deposit, you can guarantee that there is a discrepancy immediately, and the customer will basically accept the redemption payment for the discrepancy, because he has already paid so many deposits, it is impossible for the discrepancy on the document to not deposit or deposit Too. So this payment method is also very, very safe.
It should be noted here that the T / T deposit is received first, and the last payment is irrevocable letter of credit, which is a very safe payment method. However, it must be noted that T / T will receive the deposit first, and the final letter of credit. A friend told me that as a customer in Bangladesh, 70% of the amount of the letter of credit has been used as a deposit,
For the 30% balance payment, please see the wonderful payment method like T / T. This payment method is very unsafe, because after the goods are shipped to the ship and a full set of documents is received, if the customer does not pay the final T / T payment, the exporter is in a very embarrassing situation. If you do not pay the bill, the goods will arrive in Hong Kong immediately and there will be a demurrage fee. After the bill is paid, the customer will not have the effective means to limit the payment. Sure enough, after a while, his client said to let them pay the order first, and then pay after the sale of the T / T part ... Such a payment method is very risky and needs to be avoided
The above three payment methods can be said to be 99.99% safe. If you have strict risk control, the above three methods are definitely the first choice, basically there will be no risk of bad debts and no payment.