E-payment The growth of modern civilization hinges on payments.
There is an added level of risk present when conducting transactions internationally. This risk is in the form of theft, fraud, non-payment, complications of multiple governing agencies, and the inability to meet time deadlines.
There are many financial payment tools that are currently being used to combat the problem of international transaction risk. The most common payment types for an international transaction are a letter of credit, documentary draft for collection, open account, payment in advance, and barter.
Most of these transactions involve not only the importer and the exporter, but the respective banks of the parties involved, freight forwarders, and government customs agencies as well. The Role of an Importer: An importer is a company that is bringing in, or importing goods to their domestic market for sale or distribution.
Importers benefit from this practice because they can acquire products at a higher quality, or lower price, than would be available domestically. The Role of an Exporter: An exporter is a company that is shipping, or exporting, goods Business payment methods essay their domestic market for sale or distribution.
Exporters benefit from this practice by making a profit with the sale or transfer of goods to international markets, or by expanding into new international markets to broaden their customer base.
The Role of A Forwarding Company: A freight forwarder is a company that ships goods, on a regular basis, to different locations around the world. An exporter will call a forwarder if that exporter wants to ship goods overseas without having to take on the responsibilities of logistics, customs, and paperwork by themselves.
A freight forwarder's main concern is the efficient shipment of goods all over the world. Another objective of the forwarder is to make money. They make their profits by streamlining shipments, increasing efficiency, and spreading out costs by moving a constantly high volume of products on a regular, routine basis Hickman, p.
Regardless of the forwarder's desire to make a profit off of the exporter, an exporter ends up saving a lot of money by using a forwarder's services Hickman, p.
The money that a forwarder might charge to ship a product is minuscule compared to what an exporter would pay if they tried to ship the products without using a forwarder Hickman, p.
Forwarders know the customs regulations of all of the world's countries. Forwarders handle the massive amounts of paperwork that is involved in exporting a product to a different country.
Forwarders have good working relationships with the shipping companies that provide actual overseas transportation. The bottom line is that employing the services of a forwarding company is always a good idea for an exporter.
The Role of Governing Agencies: Customs agencies are powerful departments of a national government that regulate what comes in and goes out of that country Weiss, p.
Some of the tasks of a customs agency are: They do this to get statistical information concerning domestic product flow to and from other countries, computation of consumption rates, and to help in computation of the domestic country's GDP.
The Role of a Bank: Banks serve as a company's main financial resource by providing tools to raise capital, a place to store capital, and most any dimension concerning a company's money. A very common payment method for a cross border transaction between two companies is a letter of credit.
A letter of credit reduces most of the risk and uncertainty that is usually involved when goods are purchased from, or sold to a foreign, and sometimes unfamiliar client Sowinski, p.
The reduction of risk with using a letter of credit comes from intensive bank involvement with the entire transaction process.
Banks generally issue two distinctly different letters of credit; the first being a personal letter of credit, and the second is a commercial letter of credit.
A personal letter of credit is issued to an individual who travels a lot, and wants to forward some money to a foreign bank for convenience, risk reduction, or exchange rate arbitrage.
A commercial letter of credit is what a company would use to make a foreign transaction Weiss, p.Essay: E-payment The growth of modern civilization hinges on payments. Systems of payment have substantially metamorphosed over time, from the stone age barter system, through to coins and to virtual payment (Ferguson, ) Ejisi Volume Typical payment methods used in a modern business context include cash, check, credit or debit card, money orders, bank tansfers and online payment services such as PayPal™.
Payment methods There are two types of payment methods; exchanging and provisioning. International Payment Methods This Research Paper International Payment Methods and other 64,+ term papers, college essay examples and free essays are available now on timberdesignmag.com Autor: review • March 1, • Research Paper • 5, Words (21 Pages) • 2, Views.
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