Remittance In International Trade

In international trade, remittance is usually made by the buyer to the seller through the bank by the bank according to the terms and conditions stipulated in the contract (such as advance payment or cash on delivery or voucher payment).

There are four parties to remittance, that is, remittances, remittances, remittance banks and payee.

The flowchart is shown in the diagram:

(T / T).

After receiving the entrustment of the remittance, the remittance Commission will notify the recipient's local remittance bank by telex, and entrust it to pay a certain amount of money to the designated payee.

Telegraphic pfer is widely used in three ways of remittance because of its fast payment.

However, the cost of telegraphic pfer is higher than that of the following letter because the time spent by the bank is short.

(M / T).

The difference between mail pfer and telegraphic pfer is that the remittance bank sends a payment order to the incoming line, so the remittance rate is slower than the telegraphic pfer.

Because of the large number of manual procedures, European banks no longer handle mail pfer business.

(D / D).

Draft is a way of remittance based on bank sight draft.

A bank draft on the basis of the name of the agent or bank account of the remittance holder shall be opened by the remittance payer, and the bank draft payable to the remittance holder shall be sent to the payee by the remittance himself.

The drawee receives the money from the drawee (bank) on the bill of exchange by the payee.

The advantages are simple procedure and low cost.

Because settlement by remittance is either cash on delivery or prepayment.

If it is cash on delivery, the seller will provide the credit well financing fund to the buyer.

In advance, the buyer will provide the seller with credit and financing.

In China's foreign trade practice, remittance is usually only used to pay the amount of the final payment, commission and other expenses, not a major way of settlement.