International Payment - Less Risk (1 Viewer)

[Khan.Paki]

We had a debate in our class. Which international payment provides importer with the LEAST amount of risk (for eg. importing electronic goods from China).

A) Payment in Advance
B) Letter of Credit
C) Clean Payment
D) Bill of Exchange

Please justify your answer. Thanks

 

[nisak]

Clean payment will expose the importer to the lowest risk because under this method, the exporter ships the goods directly to the importer before payment is received. The importer therefore doesn’t send the payment until after they receive the goods. But this will expose the exporter to greater risk (being the opposite)

 

[Flop21]

For exporters (from 2011 HSC exam):

For importers:

Guessing that means clean payment?