Discusses the most common methods of payment, such as open account, letter of credit, cash in advance, documentary collections, factoring, etc. Includes credit-rating and collection agencies in this country. Includes primary credit or charge cards used in this country.
Last Published: 2/12/2019

The most common method of ensuring payment to exporters is via Letter of Credit (L/C).  The L/C should conform to international guidelines established by the International Chamber of Commerce (ICC), as published in the Uniform Customs and Practice for Documentary Credits (UCP).  L/Cs offer certain advantages to the seller, namely they make payment dependent on the creditworthiness of the opening (issuing) bank rather than the buyer.  For the buyer, an L/C helps ensure all the seller's documents are correct before payment is made.  Other possible methods of international commercial payments include cash, open credit, and documentary credit sales.
Several years ago, the Embassy conducted a survey of local companies that regularly import products from the U.S. to determine which payment methods they used most frequently.  The full results of the survey are available below.  (Note:  the cumulative total of payment methods used exceeds 100 percent because some respondents reported using more than one payment method.)
 

Payment MethodPercent of Respondents
Open Account55.5%
Commercial Letter of Credit32%
Bankers’ Acceptances10%
Documentary Collections5%
Cash in Advance4.5%
Other Methods10%

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.