Financing and Payments

Published: September 11, 2012
Last Revised: September 11, 2012

Understanding trade finance and payments helps exporters turn opportunities into sales and get paid for those sales in full and on time.

There are four methods of payment in international trade:

  • Open account
  • Documentary collection
  • Letters of credit
  • Cash-in-advance

Each payment method contains varying levels of risk for the importer and exporter. An appropriate payment method must be chosen carefully to minimize the payment risk to the exporter while accommodating the needs of the importer.