While doing business, an exporter often extends credit to an importer, which increases business possibilities, but also increases risk of payment. Receiving the entire payment, in due time is the foremost concern in exporter’s mind and the level of risk in various payment terms is the major consideration.
Following are the recognized methods of effecting payments under International Trade
- Payment in advance
- Letter of Credit (Import LC)
- Bill of Exchange
- Open Account

Methods of Payment