Foreign trade transactions are different from domestic trade. The realization of these transactions between countries and the use of different currencies increase the risks. For this reason, different payment methods are used in foreign trade transactions. The importer and the exporter can determine the payment method among themselves. These payment methods are;
a) Advance Payment: The payment is the receipt of the money by the exporter before the goods are delivered to the buyer. In this form of payment, all risk is undertaken by the buyer of the goods.
b) Payment Against Goods: It is the payment of the cost of the exported goods after the goods are received by the importer.
c) Payment Against Document: It is a form of payment made by receiving the documents showing that the exported goods have been loaded to the shipping vehicle from the export country and shipped from the bank by paying the export price.
d) Payment with Acceptance Credit: It is a form of payment in which the buyer undertakes to pay the cost of the goods in a certain term after receiving the goods and in which a policy / bond related to this payment is a vehicle. Banks act as intermediaries for buyers and sellers in the payment with acceptance credit.
e) Consignment: It is a form of export that is carried out by delivering the goods to importers, brokers, exporters' branches abroad, for later sale. This payment is based on trust.
f) Payment on Account: It is a form payment of all or part of the export costs by importing goods and/or services and payment made in the form of cashing off any positive or negative difference.
g) Counter Trade: It is a type of barter transaction. It is the form of payment that the buyer applies in cases where there is not enough foreign currency to pay the import price, but when he has the goods he wants to sell. Counter trade can be applied in a variety of ways.
Barter: It is the exchange of goods that are deemed to be of equal value, executed under a single contract without financial payments or fund transfers.
Counter Purchase: It is the compensation of the costs of goods and services subject to export with the import of other goods and services that substitute money according to the agreement between the countries and companies that are parties to foreign trade.
Clearing: In countries that have signed a clearing agreement, importers pay the price of the goods they import to an institution in their country, such as the Central Bank or Clearing Office, in their own currency. The accounts created in this way are matched with the accounts consisting of the money deposited by the importers of the other country at the end of the period.
h) Letter of Credit: It is a credit account opened by the importer to a bank on behalf of the exporter abroad, committing to make payment to the exporter upon shipment of the goods in accordance with the terms of the contract.