International trade is built on trust, but every transaction carries risk. Choosing the right payment method is one of the most important decisions for both exporters and importers. Traditionally, banks have shaped this process, but today digital solutions and blockchain technology are transforming how payments are made.
Below, we look at the six main payment methods in foreign trade—from the most traditional to the newest blockchain-based innovation.
1. Advance Payment (Cash Payment)
The importer pays before shipment, and the exporter delivers the goods later.
- Safest for the exporter.
- Riskiest for the importer (no delivery guarantee).
- Common in monopoly goods or when demand is very high.
2. Payment Against Goods (Open Account)
The importer pays after receiving the goods.
- Safest for the importer.
- Riskiest for the exporter (risk of late or no payment).
- Most commonly used in Türkiye, especially when long-term relationships exist.
3. Payment Against Documents
The exporter ships the goods and sends documents via banks. The importer can only collect goods from customs after making or promising payment.
- Safer than open account for exporters.
- Importer may still refuse documents.
- Moderate costs and bank involvement.
4. Payment with Acceptance Credit
The importer accepts a bill of exchange (policy) guaranteed by a bank and pays at maturity.
- Provides financing flexibility for importers.
- Some assurance for exporters.
- Higher costs and slower process.
5. Payment by Letter of Credit (L/C)
The importer’s bank guarantees payment once the exporter fulfills all terms and provides compliant documents
- Balanced risk for both parties.
- Secure bank guarantee.
- High commissions, complex, and slower than other methods.
6. Escrow Safe Payment (Blockchain-Based)
A new generation solution in trade finance. Escrow Safe Payment uses blockchain technology and smart contracts to secure funds until both importer and exporter meet their obligations.
How it works
- Importer deposits funds into an escrow wallet.
- Exporter ships goods and provides proof.
- Smart contract releases payment automatically once conditions are met.
Why it matters
- Lower cost than traditional Letters of Credit.
- Fast, transparent, and globally accessible.
- Balanced risk: importers pay only for delivered goods, exporters are guaranteed payment.
- Especially valuable for SMEs that cannot afford costly bank instruments.
Comparison of Payment Methods
| Method | Exporter Risk | Importer Risk | Cost | Speed | Bank Involvement |
|---|---|---|---|---|---|
| Advance Payment | Low | High | Low | Fast | None |
| Payment Against Goods | High | Low | Low | Fast | None |
| Payment Against Documents | Medium | Medium | Medium | Medium | Partial |
| Acceptance Credit | Medium-Low | Medium | Medium | Slow | Strong |
| Letter of Credit | Low | Low | High | Slow | Strong |
| Escrow Safe Payment | Low | Low | Low–Medium | Fast | Minimal (Digital) |
Conclusion
Foreign trade still relies heavily on traditional payment methods, but the future is digital. Escrow Safe Payment combines the trust of bank-backed instruments with the efficiency of blockchain, offering a secure and affordable alternative for businesses of all sizes.
By staying informed and choosing the right payment method, exporters and importers can minimize risks, reduce costs, and build stronger global trade partnerships.
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