Chapter 7:

International Payment
 Chapter 7:
International Payment

CONTENT
 An overview of international payment

 The basis of international payment

 International payment instruments

 Methods of international payment

 Risks in international payment operation

 Questions for discussion

 Chapter 7:
International Payment
An overview of international payment
o Concept of international payment, characteristics and
role
o The international payment participants
o Standards and Practices used for international
payment
 Chapter 7:
International Payment
Concept of international payment, characteristics and role
o Concept:
o The international payment is defined as a payment operation
between entities residents and non residents has international
scope
o Characteristics :
- Related to economic entities in different countries
- Concern with foreign currency and conversion methods,
exchange rate, etc
- Potential Risks and Consequences are significant
- Follow the international standards and practices
o Role: International payment is critical basis for the formation
and development of international financial system : Circulating
goods, services and cash flows
 Chapter 7:
International Payment
The basis of international payment
o Legislation and international covenants
1. United Nations Convention on contracts for the international trade
Wien Convention 1980
2. Geneva Convention1930 “Uniform Code on Bills of exchange”
3. Geneva Convention1931 “International Cheque”
4. Other international laws and conventions
o International rules and customary
1. The conditions of international trade (Incoterms)
2. The consistency of Practice principles for Documentary Credits
(UCP)
3. Uniform Rules for Collection (URC)
4. Uniform Rules on inter-bank reimbursement (URR)
 Chapter 7:
International Payment

The international payment participants

1. Import export Enterprises and Resellers
2. Commercial banks
3. Transportation companies
4. Insurance companies
5. Agency represented other nations government
 Chapter 7:
International Payment

Basis of international payment

o Foreign trade contracts
o Commercial documents in international settlements
o International payment conditions
 Chapter 7:
International Payment

Foreign trade contracts

o Concept and characteristics
o The content structure of foreign trade contract
o Examples
o Experiences on examining the contract of sale in
international settlements
 Chapter 7:
International Payment

Commercial documents in international settlements

o Transport document
o Goods insurance document
o Goods document
 Chapter 7:
International Payment
The conditions in international settlements
o The payment currency
o Payment locations
o Payment time
o Payment methods
o Guarantees on payment contract value
 Chapter 7:
International Payment
International payment instruments
o Commercial paper: Debentures and Bill of exchange
o Cheque in international payment
o Bank cards
 Chapter 7:
International Payment
Commercial paper: Debentures and Bill of
exchange
o Debentures
o Bill of exchange
o Commercial paper characteristics
o Regulations on payment of draft
 Chapter 7:
International Payment
Cheque in international payment
o Cheque concept
o Type of cheques in international payment
o The process international payments via cheque
o Regulations for international payment via cheque
 Chapter 7:
International Payment
Bank cards
o The concept of Bank cards
o Type of Bank cards
o Bank cards used in international payments
o Regulations on the use of bank cards in international
payment
 Chapter 7:
International Payment
Methods of international payment
1. Advance payment method
2. Open account method
3. Remittance method
4. Collection of payment method
5. Letter of credit method
 Chapter 7:
International Payment
Advance payment method
o Characteristics and apply conditions
o Advantages and disadvantages
o The payment process
 Chapter 7:
International Payment
Open account method
o Characteristics and apply conditions
o Advantages and disadvantages
o The payment process
 Chapter 7:
International Payment
Collection of payment method
o Characteristics and apply conditions
o Advantages and disadvantages
o The payment process
 Chapter 7:
International Payment
Letter of credit method
o Characteristics and apply conditions
o Advantages and disadvantages
o The payment process
 Chapter 7:
International Payment
Risks in international payment operation
o Types of risks in international payment
o The consequences in international payment
o Solutions to prevent and reduce the risk in
international payment
 Chapter 7:
International Payment
Questions for discussion
o Features and international payment conditions. The
meaning of the research problem
o Comparing international payment methods
o Risks of international payments
o The process of implementing Letter of credit method
o Current situation of international payment
operations in Vietnam including evidences, reviews
and improving methods