Three methods of the international paymentsThe three methods of the international payments are remittance、collection and letters of credit.RemittanceRemittance, as a frequent payment method in international trade , refers to the transfer of funds from one party to another among different countries. Remittance, which is always used by those import enterprise, indicating the bank to a certain way pay a certain sum of money to the export enterprises. Now the World Bank generally use the remittance way, as SWIFT system treatment telegraphic transfer (T/T). By remittance, the goods’ direct payment provided by import enterprise is paid to export enterprise, while the documents representing the goods by the export enterprise directly submitted to import enterprise. Payment and the order of the shipment, directly determine the size of import and export both in case of any risks. Practically, some import enterprises’ remittance is divided into former T/T and after T/T j before the so-called roughly the equivalent of advance payments, T/T roughly equivalent to cash on delivery. Obviously, if export enterprise products’ market is competitive, it can make proper requirements before T/T import enterprise pay the cost only if the import and export both have good credit and credit after T/T is stable and powerful tool for orders.CollectionA collection means an arrangement whereby the seller draws a draft on the buyer and authorizes its bank to collect the money from the buyer . Collection differentiates from open account or cash in advance.Collection is pointed out in the shipment of the goods after mouth enterprise issued by financial documents and commercial documents, entrust its bank through the collecting bank which import enterprise is located to its payment. Specifically, under different way remittance export enterprise, the collection ofwhole set of documents transmitting through Banks. Import and export enterprise bear risks are relatively small, because only export enterprise after the shipment of the goods can tip documents. At the same time import enterprise pays or accepts samples according to the document can be achieved. Collection can be classified into two types, one is against payment (D/P), one is accepted (D/A). Generally speaking, d/p has lower risk than d/a, because export enterprises’ prompt payment is received, or still control the goods. D/A holds as long as import enterprise acceptance, the bank will release the documents. But import enterprise acceptance is totally commercial creditable, expire to pay no payment still depend on import companies credit.Letter of creditA letter of credit is a conditional written undertaking by the issuing bank to pay money, because payment is upon presentation of a draft or written demand for payment together with specified documents.L/C refers to the issuing bank that import enterprise request, made a study on the complying presentation to honor the firm commitment. It is the bank credit intervention in the product of payment in international trade. It will appear not only in largely solved the problems between import and export enterprises in the contradiction about mutual distrust, but also can make both sides in the payment process access to bank financing in convenience. However, the Banks made promises for the confirmation as conditional, namely, the presentation is complying. If documents with discrepancies, issuing bank dishonored documents in accordance with the rules can be use as rules. Export enterprises in documents under construction and repair system, L/C must pay extra attention and be more cautious, in strict compliance with the terms and conditions of the credit. Therefore, the L/C made for export enterprise in full payment according to ability and level of underlying demand is higher. But currently, our country foreign trade enterprise, especially small andmedium-sized ones, lack high quality documentary personnel, in other words, the business level needs to improve.The character of the three methodsRemittanceOne, big riskRemittances foundation is commercial with their after delivery, the exporter can recover smoothly in payment, the importer success in advance payments after receipt of goods in conformity with the contract depends on her, namely separately. The importer or exporter prestigeTwo, finance burden imbalanceIf is cod, by exporters are funding burden; If a prepaid payment by the importer, the funding in settlement shoulders, and in the process from the bank, importers and exporters cannot get trade financing.Three, settlement of simple, rapid and low costRemittance settlement procedures simple, cheap, and settlement quickly. If trade mutual comparison trust, remittances settlement is very ideal pay or settlement.Generally speaking, the remittance settlement is a beneficial to importers and exporters of unfavorable settlement. Because, the current international market mainly is a buyer's market, the remittance settlement is generally cod not advance payments. Money and risk are made by exporters to assume. CollectionCollection of the risk is bigger, to the exporter shall than D/A risk of D/P more big. Documentary collection means after the first delivery, payment, therefore it shall risk is bigger. Payment by import business reputation, if he imported people went bankrupt, the loss of payment ability, or after shipment importcargo import prices, who refuses to pay, or import excuse who had not received the import license, or didn't get into foreign exchange, forbidden import or unable to pay foreign exchange, the exporter shall not only cannot recover payment on time, also may cause the loss of payment two empty. Collection of imported people more favorable, the formalities can rent issuing and advance deposit, and can borrow goods gets the convenience. Of course collection of imported men aren't no risk. If, after paying acquired imported shipping documents, and obtain goods, if the goods are found not in conformity with the contract, or simply false, will therefore losses, but overall, collection of imported people better, too.Letter of creditAdvantage1, A bank credit participation, a lower risk DP, DA and after T/T is related to the business risks, and L/C is a bank risk, the bank generally has a certain scale, and pay attention to the intangible value, so relatively safe.2, The constraints of UCP600 art.4 (b), trade by both sides trading cautious degrees higher.3, From the side can examine buyers strength. Buyers need to hand in the L/C must deposit, margin ratio of buyer's credit and depends on how much power. If the buyer can open big l/c, we can determine from flank buyer strength.4, Even if be dishonored, exporters still can control cargo right, the loss is relatively rare.Disadvantage1, Documents more demanding, prone to discrepancies dishonored.2, Cost is higher, affect exporters profits. L/C involving the advising charges reading-writing-discussion paying, the discrepancies fee, so many costs, if the credit amount is small words, cost more than 1% combined will.3, Encounter soft terms trap. Common soft terms has a guest inspection terms, 1/3 since send terms and air bill of lading terms, these clauses mean exporters to give up the title to the goods, eventually end up two empty "money" aspect. 4, Special national credit risk. Such as Bangladesh L/C, operation, often appear extremely standard bank of the release of the documents without authorization.5, Bank risk. Ultimately, the bank is enterprise, also exist their credit risk. Especially abroad, bank admittance threshold is very low, the bank the good and bad are intermingled, a small Banks credit worthy.In international trade, a deal, import and export of payment through consultation to determine the parties may, is usually one of the above three introduced. According to different situations, such as different trading commodities, different transaction object, different trading habits etc, import and export both sides can completely combined payment to settlement, which will be two or more payment combinations. Common form: L/C with the remittance combination, L/C with collection combination, remittance and collection combination, etc. Of course, the flexible combination and pay the way the premise is, by a foreign trade enterprise to a thorough understanding and mastering the basic payment. If used properly, combination payment can reduce costs more conducive to close the sale, favors the safety, and properly handle cases timely payment, better realize the win-win import and export enterprise.Pairwise combinationLetter of credit and CollectionThis is a deal with the payment, pay, part L/C and the balance by collection way settlement. The combination forms of practice is usually: the l/c beneficiary, the exporter shall open a prescribed two draft) belongs to the partial payments under l/c by light, and its balance ticket paid shipping documents are attached to the collection bill, press the sight or d/p mode collection. This kind of practice, the proceeds of safety, the importer is can reduce pad gold, easy for the two sides to accept. But the l/c must specify the type and amount of credit and pay the types, also on collection basis in the prescribed "must be paid off all the invoice amount rear can documents" clause.In the contract, with collection combining ways for letters of credit can be the terms usually specified below: "the buyer by the seller acceptable bank before the month of shipment x days to reach the seller to open an irrevocable l/c at sight, provisions of the invoice amount x % clean draft at sight payment, with more than x % under d/p at sight on collection basis. The invoice amount 100% of the full set of shipping documents attached collection item, to buyer after full payment of the invoice spending. If the buyer fails to pay full invoice value, the shipping documents shall be held by the issuing bank at the seller's instructions processing.Remittance and Letter of creditRemittance and credit union, means part payment by l/c payments, the balance by remittance way settlement. For example, the primary products for ore deal, agreed that the l/c payable against shipping documents prescribed some invoice amount to pay for the goods at the destination, balance after the inspection after the contract or again by remittance payments. But must explicitly stipulated in the credit and use what what remittance way and the proportion of the amount paid by l/c, just in case there is controversy. Remittance and CollectionIf you want to reduce the risk of an effective exporters, the method is remittance way on collection basis, such as customers, combined with T/T way first by 20% in advance payment, balance pay D/P, as long as the market doesn’t change too much, the customer will not give up advance and refused to pay or refuse to accept.。