Types of Payments
|Unit 4.6-Types of Payments|
Unit 4.6-Types of Payments
Documentary credits and/or letters of credit are banking tools used to alleviate various levels of risk related to international business transactions. In addition to the many forms of credit-- including but not limited to irrevocable, confirmed, transferable, revolving, and standby--with each credit instrument the timing for payment must be identified. These include sight, deferred payment, acceptance and negotiation. In addition there is also much flexibility for a buyer and seller to negotiate the terms for payment. To understand this process, an international manager must be comfortable with the terminology and definitions of the parties and actions associated with this banking instrument, including but not limited to terms such as: applicant, beneficiary, issuing bank, advising bank, discrepancy and amendment.
Correlation: Materials from this unit correlate with NASBITE CGCP's Knowledge Statement 04/04/06: Knowledge of types of payment (e.g., sight, deferred, acceptance)