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International Payments

To identify the most desirable method of payment for international trade, you need to understand your options and how the risk of non-payment changes depending on whether you are the buyer or seller:

INTL-PaymentOptions-Diagram

For example, in an “open account,” the buyer assumes no risk.  Instead, the seller takes all of the political and economic risk because they rely on the buyer to pay the account as agreed.

Conversely, in a “cash in advance” transaction, the buyer pays for the goods before they are shipped and relies on the seller to deliver as contracted.  This means, in this case, the buyer assumes all the risk.

To determine your risk tolerance for a particular trade transaction, talk to our seasoned advisors.  We’ll help you assess your experience with the buyer or seller, review their credit worthiness, and research possible conditions within their home country that could affect payment remittance.  Ultimately, we’ll evaluate and explain your choices so you have a clear understanding of which option is the most beneficial option for your circumstances.

Payment Options

There are four convenient ways to make international trade payments.  Our experienced advisors can help you choose the right method for your particular need and efficiently facilitate the transaction.  So you can get back to business.

  • Wire Transfer- The fastest, easiest and most reliable method of international payment. It is the electronic transmission of funds between banks, generally through the use of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) – the principal secure international communications system for financial institutions around the world.
  • Foreign Bank Draft- A bank draft drawn by our institution on a bank in the country of currency.
  • International Check Collection- A method often used when one of the following takes place:
    • the payment check is ineligible for clearing, or there is no mechanism for clearing
    • there is uncertainty over the maker’s ability to pay
    • there is a desire to know when the check is irrevocably paid
  • Check Purchase- In this option, we reduce your foreign exchange risk by purchasing an eligible foreign currency check from you. This method provides cash management opportunities and minimizes operational tracing and follow-up associated with conventional collection methods. We do, however, reserve the right to debit your account if the check is not paid.
Contact our International Trade team at 888.461.1864 or international@nationalpenn.com.

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