What are the Payment Methods for Cross Border Transactions?
1. Letters of Credit (LCs): A common method where a bank guarantees payment on behalf of the buyer, ensuring security for both parties. 2. Open Account: The seller ships goods and invoices the buyer, who pays at a later date. This method requires a strong trust between parties. 3. Advance Payment: The buyer pays before the goods are shipped, minimizing risk for the seller but requiring trust from the buyer. 4. Documentary Collections: Banks act as intermediaries to collect payment from the buyer in exchange for shipping documents, balancing risk for both parties.