International Trade Payment Method with Special Reference to Bangladesh
Introduction:
To succeed in today’s global marketplace and win sales against foreign competitors, exporters must offer their customers attractive sales terms supported by appropriate payment methods. Because getting paid in full and on time is the ultimate goal for each export sale, an appropriate payment method must be chosen carefully to minimize the payment risk while also accommodating the needs of the buyer. This trend is attributable to the increased globalization of the world economies and the availability of trade payment and finance from the international banking community.
As shown in figure 1.1, there are four primary methods of payment for international transactions. During or before contract negotiations, we should consider which method in the figure is mutually desirable for both me and my customer.
Figure 1.1. Payment Risk Diagram
Key Points
• To succeed in today’s global marketplace and win sales against International trade presents a spectrum of risk, which causes uncertainty over the timing of payments between the exporter (seller) and importer (foreign buyer). • For exporters, any sale is a gift until payment is received.
• Therefore, exporters want to receive payment as soon as possible, preferably as soon as an order is placed or before the goods are sent to the importer.
• For importers, any payment is a donation until the goods are received.
• Therefore, importers want to receive the goods as soon as possible but to delay payment as long as possible, preferably until after the goods are resold to generate enough income to pay the exporter.
Objective of the study:
The objectives of the study are:
1. Discuss theoretical aspects of international trade payment and finance.
2. Discuss Bangladesh aspects of international trade payment and finance.
Theoretical Aspects:
There are four standard and common payment methods that are in use to make or receive payment for international trade market. It basically means received of
To succeed in today’s global marketplace and win sales against foreign competitors, exporters must offer their customers attractive sales terms supported by appropriate payment methods. Because getting paid in full and on time is the ultimate goal for each export sale, an appropriate payment method must be chosen carefully to minimize the payment risk while also accommodating the needs of the buyer. This trend is attributable to the increased globalization of the world economies and the availability of trade payment and finance from the international banking community.
As shown in figure 1.1, there are four primary methods of payment for international transactions. During or before contract negotiations, we should consider which method in the figure is mutually desirable for both me and my customer.
Figure 1.1. Payment Risk Diagram
Key Points
• To succeed in today’s global marketplace and win sales against International trade presents a spectrum of risk, which causes uncertainty over the timing of payments between the exporter (seller) and importer (foreign buyer). • For exporters, any sale is a gift until payment is received.
• Therefore, exporters want to receive payment as soon as possible, preferably as soon as an order is placed or before the goods are sent to the importer.
• For importers, any payment is a donation until the goods are received.
• Therefore, importers want to receive the goods as soon as possible but to delay payment as long as possible, preferably until after the goods are resold to generate enough income to pay the exporter.
Objective of the study:
The objectives of the study are:
1. Discuss theoretical aspects of international trade payment and finance.
2. Discuss Bangladesh aspects of international trade payment and finance.
Theoretical Aspects:
There are four standard and common payment methods that are in use to make or receive payment for international trade market. It basically means received of
References: * U.S. Department of Commerce International Trade Administration * http://en.wikipedia.org/wiki/Combined_transport * http://www.google.com.bd/search?noj=1&q=what+is+bill+of+lading&oq=what+is+bill+of+lading&gs_l=serp.3..0l10.1425.9130.0.9399.40.15.1.13.13.1.293.1568.4j4j3.11.0....0...1c.1.25.serp..19.21.982.ak_gnN5epFU * http://www.google.com.bd/search?noj=1&q=what+is+air+waybill+&oq=what+is+air+waybill+&gs_l=serp.3..0i7i30l10.642616.662149.0.662825.35.26.0.2.2.2.437.3543.11j2j5j3j1.22.0....0...1c.1.25.serp..17.18.2129.NJY6MK5lL1M * http://www.google.com.bd/url?sa=t&rct=j&q=international%20financing%20method&source=web&cd=3&cad=rja&ved=0CDsQFjAC&url=http%3A%2F%2Fwww.unescap.org%2Ftid%2Fpublication%2Ftipub2374_chap2.pdf&ei=8jULUue-IIGtPOmYgIAG&usg=AFQjCNG-edG5L12wqcReEVt-T2Ccyy7EkQ&bvm=bv.50723672,d.ZWU * tipub2374_chapter2.pdf * http://edupedia.educarnival.com/letter-of-credit-operation-in-bangladesh/ * Class Note.