What is the difference between the three categories of international settlement: remittance, collect

Remittance is unconditional payment, collection is entrusted to the bank to collect, and letter of credit is entrusted by the bank to make conditional commitments.

Remittance: 1: Remittance, also known as remittance, is a settlement method in which the payer entrusts the bank of the country where the payer is located to pay the money to the payee in a certain way.

2: In the international **, the use of remittance, usually by the buyer in accordance with the conditions and time agreed in the contract, through the bank to pay the loan.

Collection: 1: Collection is a settlement method in which the exporter issues a remitter's bill of exchange (with or without shipping documents) with the importer as the payer after the goods are shipped, and entrusts the bank at the place of export to collect the payment on behalf of the importer through its branch or ** bank at the place of import.

Letter of credit: Letter of credit is a written document issued by the bank to the exporter to guarantee the payment of the goods according to the requirements of the importer.

Differences: 1: Remittance belongs to forward remittance, and collection and letter of credit are reverse remittance. :

2: Remittance and collection are both commercial credit and high risk, while letter of credit belongs to bank credit and has high reliability.

3: remittance is divided into letter transfer (M t), wire transfer (t t) and bill exchange (D D), the speed of wire transfer is fast, the cost is higher, but lower than the letter of credit, the security is OK, it is generally used in the bank SWIFT to transmit, and the letter remittance time is long, the bill is prone to the possibility of losing the bill in the mail.

Bill exchange is a kind of remittance, although there are banks involved, but the bank only mentions the service and does not provide credit, the bank charges a lower handling fee, and the security is lower;

Collection is the exporter entrusts the bank to collect the money on behalf of the seller, the bank is still not responsible for providing credit, the fee is higher, if the choice of the document against acceptance in the collection, the seller is the most risky.

The letter of credit is provided by the bank, and the bank is only responsible for reviewing the documents and not the goods. That is, as long as the seller submits the documents in accordance with the provisions of the letter of credit, the payment can be obtained. Minimal risk for the seller. Bank charges are the highest.

Answer]: Chongtan C letter of credit is the main way of international settlement. The settlement method of the letter is the credit provided by the bank to both the import and export parties, which is the bank credit.

Summary. Hello, it is a pleasure for you, what is the difference between collection, remittance and letter of credit, pro, collection, remittance and letter of credit are commonly used payment methods in the international **, the differences between them are as follows: collection (d p):

The seller handed over the goods to the bank and asked the bank to collect the payment from the MAI party. After receiving the payment, the seller sends the goods to the MAI party. Collection is a relatively safe payment method because the bank regulates and manages the collection and payment of money.

Remittance (C F): MAI pays the payment to the bank, which transfers the payment to the seller. Remittances are often used between two parties to a large transaction or a transaction with low creditworthiness.

Letter of Credit (L C): MAI applies to the bank to open a letter of credit, which stipulates that the seller must deliver the goods in accordance with the terms of the contract and guarantee the safety of the payment. If the seller delivers the goods in accordance with the requirements of the letter of credit and provides the required documents, the bank will pay the MAI party.

A letter of credit is a relatively safe payment method as it secures the interests of both the mai seller and the seller.

What is the difference between collection, remittance and letter of credit?

Hello, very happy for you, what is the difference between collection, remittance, letter of credit, pro, collection, remittance and letter of credit is a commonly used payment method in the international **, the difference between them is as follows: collection (d p): the seller hands over the goods to the bank, and asks the bank to collect the payment from the mai party.

After receiving the payment, the seller sends the goods to the MAI party. Collection is a relatively safe payment method because the bank regulates and manages the collection and payment of money. Remittance (c f):

MAI pays the payment to the bank, which transfers the payment to the seller. Remittances are often used between two parties to a large transaction or a transaction with low creditworthiness. Letter of Credit (L C):

MAI applied to the bank to open a letter of credit, which stipulated that the seller must deliver the goods in accordance with the terms of the contract and guarantee the security of the payment for the goods. If the seller delivers the goods according to the requirements of the letter of credit and provides the documents that meet the requirements, the bank will pay the MAI party. A letter of credit is a relatively safe payment method as it secures the interests of both the mai seller and the seller.

According to the needs of both parties to the transaction and the ability of the wind to bear, choose the appropriate collection method, such as DP (document against payment), DAP (carrier delivery) or DP (payment receipt), etc. Confirm the terms of the letter of credit: Before proceeding with the collection, you need to carefully read and confirm the terms of the letter of credit, including the description of the goods, the amount, the shipping period, the guarantee, the document requirements, etc.

Before submitting the documents, be sure to carefully check the accuracy and completeness of the documents to ensure that they meet the requirements of the letter of credit and the practice of the hanging industry. Pay attention to wind control: In the process of collection, it is necessary to pay attention to wind control, such as reasonable selection of transportation companies, purchase of mai freight insurance, etc.

Follow up the payment in a timely manner: After receiving the payment, it is necessary to follow up the arrival of the money in time to ensure the safety of the funds.