INTERNATIONAL BANKING - International Banking Services

For Exporters

There are four primary methods of payment used by exporters. Each has pros and cons, but exporters reduce their risk as they move from an open account toward pre-payment, as explained below. For importers, the opposite is true. These are your options:

Open Account - This method is usually the least desirable option for exporters, and is not advised when substantial sales are involved, or when parties are unfamiliar with each other's business practices. Parties should be familiar with each other, as the terms of payment are based primarily on trust.

Letters of Credit - This method ensures that the importer's obligation to act is in accordance with the agreed terms of the business contract. The exporter's risk is lower with the assurance of timely payment from the issuing bank when the terms are fulfilled. This method is used when the transactions of both parties are newly established.

Pre-payment - This is the most immediate and secure method of payment for an exporter, but is typically difficult to negotiate with importers. The importer pays in advance, before receiving the merchandise.

If you have any questions about International Banking Services for Exporters, please email us at info@eastwestbank.com.