payment

Whatwillyoudowhenyouseesomanyelectronicgoods?StepOne：Lead-inStepTwo：TermsofPayment一.IntroductionPaymentplaysanimportantroleinforeigntrade.Itisoftencomplicated.Thefinalresultofallbusinesstransactionistogainthevalueofthegoodssuppliedorservicerendered.Ifpaymentisnotensured,thenthetransactionisquitemeaningless.Soitisvitallyimportanttoensurepaymentinasoundway.Ininternationaltrade,therearethreekindsofpayment:1.Remittance(汇付)2.Collection(托收)DocumentagainstPayment（付款交单）DucumentagainstAcceptance（付款交单）3.Letterofcredit（信用证）Themostwidelyusedmethodisletterofcreditwhichisthemostreliableandsafestpaymentforbothsellersandbuyers(1)payer(importer)(2)payee(exporter)(3)Remittancebank1.Remittance(汇付)Remittance,asafrequentlyusedpaymentininternationaltrade,referstofundsfromonecountrytoanothercountry.Itcovers3parties:(1)MailTransfer(M/T)(2)TelegraphicTransfer(T/T)(3)DemandDraft(D/D)1.Remittance(汇付)Threekindsofremittanceincludes2.CollectionCollectionmeansthebankcollectsthemoneyfromthebuyerandremitittotheseller.Documentsagainstpayment(D/P)Documentsagainstacceptance(D/A)UnderthetermsofD/PandD/A,banksarenotliablefornon-paymentoftheimporter.Thebanksonlyofferserviceofcollectingandremitting.D/Patsight(Thebuyerpaysforthedraftassoonasitispresentedandgetsdocuments)TwokindsofD/PD/Paftersight(Thebuyerisgivenaperiodoftimesuchas30daystomakepaymentafterpresentationofthedocuments.Butheisnotallowedtogetdocumentsuntilhepays.)D/Pat30day’ssightD/A:Buyerscangetthedocumentsagainstacceptanceofthedraftdrawnbyexporters.D/Aat90days’sight3.LetterofCreditTermsofpaymentisanimportantpartofsalescontract.Fromtheseller’spointview,thebesttermsofpaymentisfullpaymentincashatthetimeofsalewhilethebuyerwouldprefertohavethegoodsbeforemakingpayment.Sincetheimporterandexporterareseparatedfromeachotherbythousandsofmiles,thisaddstothedifficultyofcomingtoagreementonhowpaymentshouldbemade.Atthispoint,theletterofcreditcanbeextremelyuseful3.LetterofCreditbecauseL/Cisabank’sguaranteethatassuresthesellerofpaymentifhemakestheagreedshipment.Ontheotherhand,L/Calsoassuresthebuyerthatheisnotrequiredtopayuntilthesellershipsthegoods.ByUsingL/C,themutualdistrustbetweenthebuyerandsellerisrelievedtoagreatextentasL/Cisbankcredit,whichissuperiortocommercialcredit.1.documentarycredit(跟单信用证）vscleancredit(光票信用证）2.revocablecredit（可撤销的信用证）vsirrevocablecredit（可撤销的信用证）3.confirmedcredit(保兑的信用证）vsunconfirmedcredit(不保兑的信用证)4.Transferablecredit(可转让的信用证）vsnon-transferablecredit(不可转让的信证5.Sightcredit(即期信用证）vstimecredit(远期信用证）CategoriesofL/CStepthree:Conclusion:1.Whichtermsofpaymentispaymentismostreliableforbothbuyerandseller?2.Howmanykindsofpaymenttermsundercollection?3.Whichkindofpaymentdobuyerprefer,D/PorD/A?4.CanbuyergettheshippingdocumentswithoutmakingpaymentunderD/Pterms?5.Supposeyouareabuyer,whichtermsofpaymentdoyoulikemost?1.termsofpayment/paymentterms/modeofpayment2.openanL/Catsight/openasightL/C3.paymentbyirrevocableletterofcreditpayableagainstshippingdocuments4.makeanexceptionandacceptD/AorD/P5.insistonpaymentbyL/C6.payadeposit7.tieupmoneyandincreasethecost8.drawonsb.9.TomeetyouhalfwayStepFourDrills(Usefulphrases)1.Negotiatingmodeofpayment2.UrgingestablishmentofL/C3.AmendingL/C4.AskingforextensionofL/CLettersregardingpaymentoftenfallintothefollowingtypes.StepFourDrills(Dialogue)Mary:Well,we’vesettledthequestionofprice,qualityandquantity.Nowwhataboutthetermsofpayment?Peter:Weonlyacceptpaymentbyconfirmedirrevocableletterofcreditpayablebydraftatsight.Mary:Isee.CouldyoumakeanexceptionandacceptD/AorD/P?Peter:I’mafraidnot.WeinsistonpaymentbyL/C.Mary:Totellyouthetruth,aletterofcreditwouldincreasethecostofmyimport.WhenIopenaletterofcreditwithabank,Ihavetopayadeposit.That’lltieupmoneyandincreasethecost.Peter:Consultyourbankandseeiftheywillreducetherequireddeposittoaminimum.Mary:Still,therewillbebankchargesinconnectionwiththecredit.ItwouldhelpmegreatlyifyouwouldacceptD/AorD/P.Youcandrawonmejustasiftherewerealetterofcredit.Itmakesnogreatdifferencetoyou,butitdoestome.Peter:Well,youmustbeawarethatanirrevocableletterofcreditgivestheexportertheadditionalprotectionofbanker’sguarantee.WealwaysrequireL/Cforourexports.Andtheotherwayround,wepaybyL/Cforourimports.Mary:Tomeetyouhalfway,whatdoyousayif50%byL/CandthebalancebyD/P?Peter:I’msorry.ButI’mafraidIcan’tpromiseyoueventhat.AsI’vesaid,werequirepaymentbyL/C.AskingForPaymentbyD/ADearSirs:ThankyouforyourletterofApr.5thcoveringpaymentofourorderNo.125.Wearepleasedthatyouareabletoshipourorderingoodtime,butwearesurprisedthatyoustilldemandpaymentbyL/C.Afterlongyearsofsatisfactorytradingbetweenus,wethinkthatweareentitledtoeasierpaymentterms.Mostofoursuppliersaredrawingonusat60-dayD/A,andweshouldbegratefulifyoucouldgrantusthesameterms.Wearelookingforwardtoyourfavourablereply.Yoursfaithfully,StepFourDrills(Letters)Theletteriswrittenbyseller,askingforeasypayment.Para1:Openingsentence(Thanksforlettercovering…)Para2:AskforeasierpaymentbyD/APara3:WishtogetanaffirmativereplyStepSevenSumupthemainideaoftheaboveletterSuggestingPaymentbyD/PDearSirs:WehavereceivedyourletterofApr.15thas