International business Guide

Methods of Payment Whether doing business domestically or internationally, buyers and sellers have certain basic objectives when they settle upon a mutually acceptable method of payment: Buyers want to receive the goods they order. Sellers want to be paid the agreed upon price in a timely manner. While familiarity with domestic trading practices makes selecting a payment method here in the U.S. relatively straightforward, trading in foreign markets can seem complicated and risky. Expanded geographic distance, foreign languages, customs, regulations and trade practices may make you hesitant to enter the international arena. A good understanding of the payment options can help you overcome many of the difficulties commonly encountered in international trade. There are four primary methods of international payment, each providing you with a different level of protection and cost. Your choice will depend upon your relationship with your trading partner, the level of risk in the transaction, and, in some cases, the regulatory requirements of foreign countries. The Expanded Payments Chart provides a comparison of the payment methods, outlining their uses and advantages. Methods of International Payment Method of Payment: Level of Protection: Cash in Advance Greater for Seller Letters of Credit Documentary Collections Open Account Greater for Buyer First National Bank will provide you with advice and guidance on selecting and structuring your international payments, as well as providing accurate and efficient processing of the transactions themselves. RELATED LINK: Industry Link Middle east Country Guide