riverwong
Joined: 26 Feb 2008
Posts: 8
Location: Zhongshan city, Guangdong, China
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 26 Feb 2008 7:30 Re: Paying Methods.. T/T , L/C ...etc |
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Generally speaking, T/T and L/C are both usual payment methods in international trade. T/T has much simpler procedure than L/C, and money should be received faster by seller than L/C. For a seller, T/T 100% in advance or before delivery is almost 100% safe without risk. But for a buyer, if they do not trust the seller very much or is sure that he will receive the goods absolutely after the payment is transferred, he prefer to choose L/C, or 30% deposit by T/T, the rest also by T/T but against the copy of B/L.
L/C is a balanced way for both a buyer and a seller. A buyer does not need to pay the money to a buyer in advance, at least no deposit, no 2nd payment, etc., only to pay all the money when his issuing bank receives the document mailed from seller's advising bank, and the document has no discrepancy. And a seller will get a guarantee that he will get the money if he can provide his advising bank the document that accords to the L/C requirement. But the procedure fee is much higher than T/T.
In fact, no matter which payment methods, to know better about your partner is most important. Even for L/C, if the seller put some garbage in the container and get the B/L, since issuing bank is responsible for document only, they don't care what products are actually inside the container, the money will be also transferred to seller's account no. if issuing bank finds no problem on the document, the buyer will finally buy the garbage with real money! So it's the reason why you should know better who you are doing business with.
My MSN is river-wong(at)hotmail.com
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