The first step any exporter must take while performing a sale is to determine whether they will be paid timely and in full by the customer. There is no universal solution for all circumstances, and numerous payment terms are available for international trade. The frequently used payment modes in international trade are cash in advance, consignment, letters of credit, open account terms, and documentary collection.
Cash in advance is the most reliable and safest method to pay during international trade. It can be done through credit card payments, funds held in escrow till the shipment is received or bank wire transfers. The cash received in advance is highly desired by most exporters and less desired by buyers.
4.Cash in Advance
5.Letter of Credit (LC)
Out of the five, cash in advance is considered the safest payment method for international trade. Cash in advance eliminates the risk of non-payment and credits as the seller is paid the total amount beforehand. Bank wire transfers or credit card payments are the frequently used payment modes when using the cash-in-advance option.