What Are the Different Methods of Payment in International Trade?

The payment method of international trade is the settlement of creditor's rights and debts with loans as the main content due to the exchange of commodities. Different payment methods include different payment times, places, and methods. The payment method of international trade is the product of the highly developed production and circulation of commodities. With the strengthening and expansion of international commodity exchanges, the receipt and payment of loans has gradually evolved from spot transactions to those characterized by settlement between buyers and sellers through banks or other intermediaries Payment methods. ^[1]

International trade payment methods

The comparison of payment nature and foreign exchange risk for several international trade settlement methods is as follows ^[2] :

payment method	Nature of payment	Foreign exchange risk
Before T / T	First payment	by small To Big
L / C	Certificate before delivery, balance on delivery
Front T / T and rear T / T intersection	Prepayment, cash on delivery
D / P spot	Delivery first, payment after delivery
D / A forward	Delivery first, acceptance of delivery documents, payment
After T / T	First goods later
O / A	First goods later