Payment is a very important link in cross-border e-commerce. With the rise of overseas shopping and the acceleration of cross-border B2B exports, a variety of settlement methods are used by us. There are many international settlement methods, such as remittance, collection, letter of credit, bank guarantee, standby letter of credit, etc.
It is worth noting that the settlement method of international payment is developing in the direction of small amount and electronicization, which also reflects the current development trend of cross-border e-commerce: many small wholesalers order and pay online through cross-border B2B platforms, and sales channels are developing in the direction of flattening.
There are four parties in the remittance settlement method, as follows.
(1) Remitter, or debtor, that is, payer, usually importer in international trade. (2) Payee (Payee/Beneficiary), or creditor, usually exporter in international trade.
(3) Remitting Bank is the bank entrusted by the remitter to remit the remittance. In international trade, it is usually the bank in the importer’s location.
(4) Receiving Bank, also known as Paying Bank, is a bank entrusted by the remitting bank to pay the remittance. In international trade, the receiving bank is usually the bank in the exporting country.
Depending on the payment instruments used in the remittance process, remittance settlement methods can be divided into three types: telegraphic transfer, mail transfer and bill transfer.