International

Unit 7 Payments
A. Let’s Read
1.1 Reading Section.....
International Payments

In many ways, International payments are similar to domestic payments. They involve a
payer using the services of one or more intermediaries to transfer value to a payee. However,
they tend to involve a number of additional complexities as a result of the distance between the
parties , the different time zones and currencies, and the need for additional intermediaries. This
has led to the development of unique payment facilities specially catering for the needs of users
of international payments. International payments, also known as cross border payments or
global payments, are transactions that involve more than just banks. They connect companies,
individuals, banks, and settlement institutions operating in at least two different countries with
different currencies that need to be paid. Moreover, when countries trade with each other and
when central banks transact with each other and banks in different countries transact with each
other, they all participate in the international payment system that forms the basis of global
payment flows.

So, who and what are the constituents and components of an international payment
system? First of all, banks and financial institutions form the first layer of international
payments where they have other global bank accounts which in turn have previous bank
accounts. This allows banks to send and receive payments from each other as they can only
debit their accounts and credit other bank accounts with them and this in turn causes payments to
flow to the receiving bank which debits the sending bank and credits their account.

An Example of How International Payments Work ?

To take an example, if you are located in the United States and want to send a funds
transfer to India, you must first setup the beneficiary and then transfer funds from your account
to the beneficiary.

No Vocabulary Meaning
 1. Credit n. money in a bank a/c; sum added to a bank a/c; money lent
by a bank - also v.
2. Credit card n. (plastic) card from a bank authorising the purchasing of
goods on credit
3. Current account n. bank a/c from which money may be drawn at any time;
checking account
4. Debit n. a sum deducted from a bank account, as for a cheque -
also
5. Deposit account n. bank a/c on which interest is paid; savings account

Task 1 (Reading)

B. Choose the best words to complete the sentences.

1. Usuance payment term can be described as: (number of) days from________

a). Invoice date

b). Shipment date

c). Sight

d). All of above

2. How are international payments in advance typically conducted?

a). Cash or personal check

b). Wire transfer or credit card

c). Consignment

d). Cash on delivery (COD)

3. What products should members use to transfer money overseas?

a). Cash Passport card

b.) Draft, telegraphic transfer or Money in Minutes Money Transfer?

c.) Travellers cheques

d.) Personal cheques

4. A buyer bears highest risks under_____ payment method ?

 a.) LC

b.) T/T Advance

c.) OA

d.) D/A

5. What personal information is required when sending a telegraphic transfer?

a). The sender's name and street address

b.) The beneficiary's name and street address

c.).The sender's membership number

d). All of the above

C. Match the method of payment with the definition.

1. Credit card a . A piece of paper which transfers money from your account to somebody
else's account.

2. Debit card b . Similar to a credit card , but usually operated by a chain of shops or
other
3. Charge card c. The money is deducted from your bank account almost immediately
4. Traveller's d. You owe the card provider money . You can pay it back in one
cheque instalment , or over a longer period if you wish
5. Cheque e. These can be exchanged for foreign currency , or in some cases used
instead of cash.

Task 2 (Writing)

B. Let’s Write

1.1 Writing Section.....

D. Fill in the essay questions below!

Make and essay or paragraph based on the guided question below

1. What do you know about international payments?

 2. What are the international payments method?

3. How many types of international payments are there?

4. What is the best international payments method?

5. How does an open account payment method word Mcq?

E. Match the type of payment with the description, and choose the best word from each
pair in grey type.

Four methods of payment for imports/exports

advance payment bill of exchange

documentary credit (or letter of credit) open account

a. ________________________________

The exporter sends the goods and 1 documents / papers to the foreign buyer. The buyer pays the
invoice when the goods arrive, or within a certain period from the invoice date. This can be
risky, as the exporter trusts the buyer to 2 respect / honour the original sales contract.

b. _______________________________

A foreign bank issues 3 a promise / an undertaking to the exporter (through a bank in the
exporter's country) to pay for the goods as long as the exporter 4 matches / complies with the
conditions of the contract. This is a much safer form of payment for the exporter. To be even
safer, the exporter can arrange for the bank in his/her country to 5 act as / be "confirming bank",
which means that the bank in the exporter's country is responsible for the transaction.

c. _______________________________

A 6 legally-binding / legally-holding agreement that the importer will, on acceptance of the bill,
pay the exporter for the goods. The risks are that the importer does not accept the bill even
though the goods have arrived, or 7 doesn't pay / dishonours an accepted bill when it 8 matures / is
time to pay.

d. _______________________________

The exporter does not 9 send / dispatch the goods until payment has been received from the
importer. There is no risk for the exporter - all the risk is 10 taken by / with the importer.

Task 3 (Speaking)

A. Let’s speaking
 1.1 Speaking Section.....

Future Continous Tense

We use Future Continous Tense to
talk about an event that is taking place
in the future or future with a specific
time description, aka sentences that use
this tense have a time duration.
 He will be staying at bank at 4 o’clock this
afternoon
 I will be making an international payment
tomorrow at this hour

F. Make a dialogue in pairs about international payments using a letter of credit then
practice with your partner in front of the class at the same time without bringing text.