7ters_of_payment.ppt

Terms of Payment Chapter Ten Lead-in Questions: How much do you know about terms of payment? And can you classify them? Brief Introduction The mode of payment includes Remittance (T/T, M/T, D/D), Collection (D/P, D/A) and L/C. L/C is the most frequently adopted mode of payment in China’s foreign trade. Introduction 付款方式 Introduction Terms of Payment Match the following. Remittance Remittance means the transfer of money from one party to another party through banks of different countries, that is, a bank (the remitting bank) at the request of its customer (the remitter), transfers a certain sum of money to its overseas branch or In international trade, this is the simplest way to transfer funds. 第二节 汇付（Remittance） 一、含义 二、汇付的种类 ㈠信汇（mail transfer,M/T） 速度慢，费用低，应用不太广泛，信函印鉴 ㈡电汇（telegraphic transfer,T/T） 速度快，费用高，应用广泛，电报密押 ㈢ 票汇（remittance by banker’s draft,D/D） 速度慢，费用低，应用不太广泛 四、汇付的性质和特点 Do you know the difference between D/P and D/A? 卖方交出单据后指示托收行在买方付清货款后才将单据交给买方。 只要买方作出在买卖双方同意的某个将来的日子保证支付款项的书面承诺，代收行即将单据交给买方。 Documentary Collection 7.3.3.4 Types of Documentary Collection 7.3.3.4 Types of Documentary Collection Advantages of Using Documentary Disadvantages of Using Documentary Collection How does a letter of credit compare with D/P and D/A are far as the exporters are concerned? Remittance and collection are two kinds of commercial credit, while letter of credit belongs to banker’s credit. To the exporter, an L/C is better than a D/P at sight, whereas a D/P at sight is better than D/A. Conclusion As collection gives sellers higher risks than documentary credit, sellers themselves should take due care in using collection. Before that, they should check the buyer’s credit standing, study the market situation, regulations and commercial customs of the importing country and cover proper insurance for their shipment to avoid the risks. Principle to Write Letters Concerni