The conditions governing the payment of products or services that are exported from one nation to another are known as export payment terms. These conditions may cover the payment procedure, the due date, and any fees or penalties that could be necessary. Prepaid, cash in advance, letters of credit, and open accounts are a few examples of typical export payment arrangements. It is crucial to carefully weigh your alternatives and select the terms that are most suitable for your particular transaction because the payment terms you choose can have a big impact on both the exporter and the importer.


How many Types of Payment terms are there in Export?


Cash in Advance (CID): The purchase is made prior to the shipment of the goods or services.

Letter of Credit (LC): When the seller complies with all of the requirements outlined in the letter of credit, the buyer's bank offers a payment guarantee in the seller's favor.

Documentary Collection: The seller gathers the required paperwork and delivers it to the purchaser's bank. Only after the buyer has made payment will the buyer's bank deliver the documents to the buyer.

Open Account: The buyer is given the option to pay for the products or services at a later time; this window of time is commonly 30, 60, or 90 days after the product has been delivered.

Consignment: Although the seller ships the buyer the items, ownership remains with the seller until the products are sold. Only after the products have been sold does the buyer pay the vendor


Prior to the products being dispatched, the buyer makes an advance payment equal to a fraction of the entire cost of the goods or services.

Deferred Payment: After the product has been dispatched, the buyer pays for the goods or services at a later time.

Cash Against Delivery (COD): The buyer makes the payment in cash when the items are delivered.

Escrow: Until the items are delivered and both the buyer and the seller are happy, a neutral third party keeps the money.

Payment on Acceptance (POA): When the buyer accepts the goods after inspecting them and determining that they are in good condition, they pay for the products or services.