There are several forms of payment each with its own element of risk.. A graphical representation of the element of risk in relation to the buyer and seller is shown below..


The buyer and the seller must come to an understanding on which form of payment terms suits them both and work according to that..
A Letter of Credit seems to be a popular method of documentary credit among sellers and buyers as all transactions go through a bank and that seems to give a level of comfort for both the buyer and the seller..
When in doubt, obviously consult a reliable Trade Finance consultant in your area..
Now that you have finalised the terms of sale,

Courtesy : Hariesh Manaadiar