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Cash in Advance

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Tanja Gruber

on 31 March 2011

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Transcript of Cash in Advance

Cash in Advance with the Cash-in-Advance payment method, the exporter can avoid credit risk or the risk of non-payment
most commonly payment methods are wire tranfers and credit cards
least attractive option for the buyer because it is not secure
appealing method for the seller - can solve cash-flow problems
buyer is concerned that the goods will not be delivered importer has to carry all riks Characteristics of Cash in Advance Applicability in high-risk trade relationships
export markets
ideal for Internet based businesses Risk Pros payment before shipment
avoid risk of non-payment
Cons May lose customers to competitors over payment terms
No additional earnings through financing operations Keypoints amount can be payed full or partial thourgh bank or wire transfer
most favorable method of internaitonal trading for exporters
least and attractive method for importers
buyer without other payment options wil lose his customer because it is the least secure method Using Cash-in-Advance importer is a new customer
creditwothiness is doubtful, unsatisfacoty
high risks in the home country of the importer
exporters product is unique
acceptance of credit card payments is a must to remain competitive
wire transfer commonly used and immediate
providing vlear routing instructions
more costly to the importer than other Cash-inAdvance options Credit Card Payment by Check international checks cause delays
no option for the European market Wire Transfer viable for consumer goods or small transaction
placed using web, telefone, fax
propre precautions should be taken
helps growing business's convenience
Full transcript