FINANCIAL TRANSACTION – Rafa Trading Company

INTERNATIONAL TRADE PAYMENT METHODS

Wire transfer, bank transfer or credit transfer is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office.
Direct payment (most secure for the buyer) — The supplier ships the goods and waits for the buyer to remit the bill, on open account terms.
Different wire transfer systems and operators provide a variety of options relative to the immediacy and finality of settlement and the cost, value, and volume of transactions.
Most international transfers are executed through SWIFT such as a letter of credit.

A letter of credit is a document, typically from a bank (Issuing Bank), assuring that a seller (Beneficiary) will receive payment up to the amount of the letter of credit, as long as certain documentary delivery conditions have been met. In the event that the buyer (Applicant) is unable to make payment on the purchase, the Beneficiary may make a demand for payment on the bank. The bank will examine the Beneficiary’s demand and if it complies with the terms of the letter of credit, will honor the demand.

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