Title: Explain methods of payment for international transactions.
Course: Opportunities in Global Trade (12056-I) > Section: Understanding Price and Payments in the International Marketing Plan

Explanation should include

- open account
- documentary collection
- letter of credit
- cash in advance.

Process/Skill Questions:

- What are the risks to the seller (exporter) and the buyer (importer) when using each method of payment?
- When is the payment made: before shipping or after shipping? Explain.
- Which methods of payment are most secure? Least secure?
- What is the most beneficial for the importer in terms of a method of payment?
- When is the method of payment agreed upon in the sales transaction?
- Why are letters of credit used to limit international purchasing risk?
- What are revocable letters of credit? What are irrevocable letters of credit?