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How to make payments
There are a number of different payment methods that can be used when
you deal with us. Three mostly used are T/T payment in advance, D/P
and L/C.
1. T/T payment in advance
2 .Letter of credit
3 .D/P (document against payment)
1. T/T payment in advance
T/T means telegraphic transfer, or simply wire transfer. It's the
simplest and easiest payment method to use.
T/T payment in advance is usually used when the sample and small
quantity shipments are transported by air. The reason why is that the
documents like air waybill, commercial invoice and packing list will
be sent to you along with the shipment by the same plane. As soon as
the shipment arrives, you can clear the customs and pick up the goods
with the documents. As it's acknowledged, T/T payment in advance
presents risk to the importer if the supplier is not an honest one.
For us, T/T advance payment is required for some high-value samples
(see our samples ordering policy) and small quantity order shipped by air.
To the customers who have long-standing business relationships with
us, we send free samples; and for the small quantity order, document
against payment is used.
It takes 3-4 days for us to received the wire transfer made from
anywhere in the world.
2. Irrevocable Letter of credit at shigh (L/C)
An irrevocable Letter of Credit is also an often used payment method.
It is often referred to an L/C. Letters of Credit are formal payment
methods that offer a lot of protection to the parties.
Simply put, a letter of credit is a letter written by the importer's
bank to the exporter. It verifies that the payment will be guaranteed
when the bank is presented with the concrete documents (bill of
lading, and freight documents). Most letters of credit are
"irrevocable" once the importer has had them sent.
A letter of credit usually includes applicant (you, the importer),
beneficiary (our,I exporter) bank, negotiating bank, specification
and quantity of the goods, amount of money, loading port and
destination port, shipment date, the validity date of the L/C, terms
and conditions agreed by both the importer and seller, and the
documents required by the importers (bill of lading, commercial
invoice, packing list, insurance certificate, inspection, etc.)
The L/C payment procedure is usually as follows:
a. You (the importer) applies to open the L/C to us (the seller)
through a bank who can open the L/C in your country.
b. The opening bank will inform The Bank in Thailand that the L/C has
been opened.
c. The Bank in Thailand will inform us that the L/C has been established.
d. We'll check all the terms and conditions listed in the L/C. If all
terms and conditions are acceptable, we'll arrange the shipment
within the time specified in the L/C.
e. After the goods are loaded onto the ship without any damage, the
ship agent will issue the clean bill of lading to us.
f. We will submit the clean bill of lading and other relevant
documents to The Bank of Thailand to gather the payment. Only
with clean bill of lading can you claim the ownership of the goods.
g. The Bank in Thailand will send the clean bill of lading and
relevant documents to your bank (the opening bank).
h. The opening bank will inform you that all documents are received.
i. You will go to the bank to make the payment to get the clean bill
of lading and relevan documents.
j. With all of these documents, you can clear the import Customs and
pick up the goods after the goods arrive on the destination sea port.
The typical L/C scenario takes 7 - 15 days to complete.
3. D/P (document against payment) at sight
The exporter (we) makes shipment and sends the shipping documents to
the importer's bank for collection. The Bank in Thailand then
sends the shipping documents along with a collection letter to the
importer's bank, who then sends a collection notice to the importer.
The importer makes payment upon receiving the notice, and only after
payment does the importer receive the original shipping documents
with which you take the physical possession of the goods.
The major advantage of the use of a cash against documents payment is
the low cost, versus using a letter of credit. But, this is offset by
the risk that the importer will for some reason reject the documents
(or they will not be in order). Since the cargo would already be
loaded (to generate the documents), we have little recourse against
the importer in cases of non-payment. So, a payment against documents
arrangement involves a high level of trust between the exporter and
the importer.
To our customers who have long-standing relationships with us, for
larger quantity order shipped by sea, we usually make the payment
arrangement as 50% made via T/T advance payment and 50% made via D/P
to expedite the whole transaction process.
There is no payment method that is perfectly
safe to both the importer and supplier at the same time. But, we
still have got to do business, right? So, we hold it's crucial to
develop a long-term relationship with our customers based on mutual trust.
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