General Practice And Application Of Remittance Business

       A、匯付業務的一般做法 

Remittance (Remittance) means that the payer remit money to the payee through the bank.

In international trade, remittance is usually made by the buyer to the seller through the bank by the bank according to the terms and conditions stipulated in the contract (such as advance payment or cash on delivery or voucher payment).

There are four parties to remittance, that is, remittances, remittances, remittance banks and payee.

The flowchart is shown in the diagram:

Remittance is divided into three forms according to the way of sending remittances to foreign exchange banks.

Telegraphic pfer (T / T).

After receiving the entrustment of the remittance, the remittance Commission will notify the recipient's local remittance bank by telex, and entrust it to pay a certain amount of money to the designated payee.

Telegraphic pfer is widely used in three ways of remittance because of its fast payment.

However, the cost of telegraphic pfer is higher than that of the following letter because the time spent by the bank is short.

Mail pfer (M / T).

The difference between mail pfer and telegraphic pfer is that the remittance bank sends a payment order to the incoming line, so the remittance rate is slower than the telegraphic pfer.

Because of the large number of manual procedures, European banks no longer handle mail pfer business.

Draft (D / D).

Draft is a way of remittance based on bank sight draft.

A bank draft on the basis of the name of the agent or bank account of the remittance holder shall be opened by the remittance payer, and the bank draft payable to the remittance holder shall be sent to the payee by the remittance himself.

The drawee receives the money from the drawee (bank) on the bill of exchange by the payee.

       B、匯付的應用 

The buyer and seller consider the pros and cons of each settlement method from the angle of formalities cost, risk and capital burden.

The advantages of remittance are simple procedures and low cost.

The disadvantages of remittance are large risk and unbalanced fund burden.

Because settlement by remittance is either cash on delivery or prepayment.

If it is cash on delivery, the seller will provide the credit well financing fund to the buyer.

In advance, the buyer will provide the seller with credit and financing.

Either way, risk and capital burden are concentrated on one side.

In China's foreign trade practice, remittance is usually only used to pay the amount of the final payment, commission and other expenses, not a major way of settlement.

Among developed countries, because large amounts of trade are internal pactions of multinational corporations, and foreign trade enterprises have reliable trading partners and sales networks abroad, remittance is the main way of settlement.

In installments and deferred payment pactions, the buyer usually pays by remittance, but usually with bank guarantee or standby letter of credit, so it is not a simple remittance way.