Trade Finance Payment Methods

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This is a payment method through which importer pays cost of goods in cash while exporter ships the goods after receiving their cost.

  • As importer pays cost of goods in cash, it is entitled to a cash discount.
  • This method of payment poses the highest risk for importer because of the payment before delivery of goods.
  • It is the most advantageous payment method for exporter.
  • As importer pays cost of goods in cash, importer doesn't pay Resource Utilization Support Fund (Turkish: Kaynak Kullanımını Destekleme Fonu -KKDF).

This is a payment method by which shipping documents for goods are handled over to importer's bank via exporter's bank only if the importer fully pays the cost of goods.

  • Exporter can transfer shipping documents for goods to importer's bank through its bank on the condition that they will be handled over upon collection of the cost of goods or directly to the importer by issuing shipping document to the order of importer's bank.
  • Exporter recognizes the fact that importer cannot clear the goods without payment. Importer makes the payment upon delivery of the goods.

This is a payment method by which importer pays the cost of purchased goods at a later date upon delivery of goods to the destination specified in the sales contract and their receipt by the importer based on the arrangement made.

  • Since the payment is made after delivery of the goods, this payment method poses the lowest risk for importer and it has the highest risk for exporter
  • This is considered as a credit offered by seller to buyer as the cost of goods is not paid yet when actual import takes place at customs. Resource Utilization Support Fund is therefore paid before clearing the goods from customs.

It is a conditional bank commitment undertaking that the cost of goods will be paid by the importer's bank (issuing bank) upon request of the importer following the presentation of documents specified in the letter of credit terms by the exporter (beneficiary) within the period specified in the letter of credit.

The exporter is ensured that the bank makes a payment when the exporter presents the document specified in the letter of credit. The importer's payment obligation occurs only when the document requested by the importer within the letter of credit is presented.

In this payment method, seller guarantees itself with a time draft while providing a term to the buyer. The documents for the shipped goods are typically transferred via banks and submitted to the importer upon acceptance of time draft. Bank avalized draft generates a payment commitment for the bank.

  • Importer pays the cost of goods on maturity date of the time draft/bond.
  • It allows importers to buy goods with a specific term.
  • Import through acceptance credit can be performed in form of cash against documents, letter of credit and cash against goods.

This is a structure through which a bank's payment guarantee is included in debt/receivable relationships arising from actual/future business activities via methods of payment which do not involve a bank's payment guarantee typically with the use of SWIFT TSU system. The bank adds its own payment guarantee to the payment guarantee agreed upon by the seller and buyer.

  • This is the fastest way of making payment among the trade finance payment methods.
  • Taking the advantage of widespread electronic data exchange, this method is based on the execution of the entire process from the order stage to the payment stage in electronic environment and on provision of a payment guarantee for the debt of the buyer by one or more banks at specific rates.
  • This is performed under URBPO, an ICC publication no. 750E which was published for the first time by the International Chamber of Commerce in 2013.
  • This is subject to Resource Utilization and Support Payment in the case of non-payment or deferred payment in clearance of goods.