What is an acceptable payment method for a that provide secure transactions for international businesses? How can an international business achieve this?
International trade poses great risk as far as payment is
concerned since the parties are physically very far away and in
most cases unknown to each other
A letter of credit is one of the most reliable and Secure means of
payment available to International traders. A letter of credit is a
guarantee made by the buyers Bank that payment will be made to the
exporter as long as all the terms and conditions are made. Hence in
case when the buyer does not make the payment his bank will do so.
This is a useful instrument when reliable credit information about
the importance is not available. It is also useful to the bhaiya
since the payment obligation arises only when the goods have been
shipped.
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