Mar 30, 2020 - 01:46 AM
Thanks for your question.
Letter of credit (LC): are special legal agreements (documents) setup between the buyer’s bank and the seller’s bank that guarantee that payment will be made when the conditions of the agreement are met (usually when shipped, upon the shipper confirming the Bill of Lading)
Documents against Acceptance (DA): a buyer is required to "accept" a seller’s time draft, thus acknowledging obligation to pay at a specific future date. The time of payment occurs at maturity of an accepted time draft, 30, 60 or 90 days after the date of acceptance or date of bill of lading
Documents against Payment (DP): a buyer is required to pay a seller’s sight draft in order to obtain shipping documents. Payment is made on presentation of the sight draft by a bank to the buyer, usually one or two weeks after shipment. Under D/P terms, the seller, through a bank acting as an agent, is able to retain control of the goods until the buyer pays. Under certain circumstances, such as to meet legal requirements of the importing country or to obtain a government permit for foreign exchange, the buyer will require possession of the documents before payment. The seller should inquire as to the practice in specific countries. Air shipments are often made under documentary bill collections. The buyer, as direct consignee of the non-negotiable air waybill, will be able to take possession of the goods before meeting his/her payment obligations
TT (Telegraphic Transfer or telex transfer or wire transfer): the transfer of funds from one bank account to another by electronic means. A wire transfer or telegraphic transfer is made when buyer is ready to pay for goods or services received. The transfer is usually irrevocable such as the receiver is protected against a return payment. Once a transfer is received it is OK to ship goods, deliver services or sign closing documents at the time of sale. Telegraphic transfers are usually fairly expensive due to the fast nature of the transaction.
Please be advised, on our portal, while verifying a buyer, we confirm certain details including the preferred mode of payment. The mentioned payment term is thus disclosed in the buy lead. However, a buyer can later opt for another mode of payment as per the deal with the supplier. Although, we do have provision for other modes of payment as well, yet it is contingent upon the buyer's preference.
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