The most acceptance and convenient means of payment in foreign trade is?
Answer Details
The most accepted and convenient means of payment in foreign trade is the Letter of Credit (LC). An LC is a document issued by a bank that guarantees the payment to the seller, provided the seller complies with the terms and conditions of the LC. The LC is a secure method of payment for both the buyer and seller, as it ensures that the buyer's payment is held in escrow until the goods are received and found to be in good condition.
The LC protects the buyer by ensuring that the payment is only made if the goods are delivered as per the agreed terms, and it protects the seller by guaranteeing that they will receive payment upon fulfilling their obligations under the contract. The LC is a widely accepted means of payment in foreign trade, as it is recognized and trusted by banks and businesses around the world.
Compared to other means of payment such as bank drafts, telegraphic money orders, promissory notes, and bills of exchange, the LC is considered the most secure and convenient option. It provides a higher level of assurance for both the buyer and the seller, and it is easier to manage and verify than other payment methods.