Import and Export Transactions 

In the prepayment method, the importer pays for the goods partially or completely before receiving the bill of lading, in other words, before acquiring the proprietary rights of the goods. After the cost of the goods are collected, the exporter delivers the bill of lading to the importer company without a mediating bank.

This payment method is the least risky method for the exporter in terms of not collecting the cost of the loaded goods, and it is the most risky method for the importer in terms of the goods not being loaded, in other words, not acquiring the proprietary rights of the goods. It is the most attractive payment method for the exporter whereas it is the most risky one for the importer.

In the Payment Against Goods method, the importer makes the payment upon acquiring the proprietary rights of the goods at a time mutually agreed on with the exporter. The exporter delivers the bill of lading, in other words, the proprietary rights of the goods before collecting the cost of the goods, without the mediation of banks.

This payment method is the most risky method for the exporter in terms of not collecting the cost of the loaded goods, and it is the least risky method for the importer in terms of the goods not being loaded, in other words, not acquiring the proprietary rights of the goods. 
It is the most attractive payment method for the importer whereas it is the most risky one for the exporter.

In the Payment Against Documents method, the importer declares the bill of lading to the bank to be sent for collection after loading the goods. The importer provides its bank instructions along with the bill of lading that specifies under which conditions the documents will be delivered to the importer and to which bank the documents will be sent to for collection. The bank of the exporter sends to the bank of the importer the bill of lading annexed to the instructions stating under which conditions the documents will be delivered to the importer. 

The bank of the importer delivers the bill of lading to the importer in line with the provided instructions or against payment or if it is a forward sale, against the acceptance of the policy by the importer company. The banks act as an element of trust between the importer and the exporter, and they mediate the collection of the costs of the documents. 
In forward sales, if the importer demands a bank endorsement in addition to the policy acceptance, the bank of the importer issues an endorsement for the policy, making a commitment for payment against the exporter concurrently.

In this payment method, the bank that issues the letter of credit on behalf of the exporter company upon the request of the importer company commits to make the payment to the exporter certainly and irrevocably if the bill of lading requested in the terms of the letter of credit is declared in accordance with the conditions of the letter of credit and international rules. 

After the exporter carries out the loading, the bill of lading requested in the terms of the letter of credit is issued in accordance with the conditions of the letter of credit and international rules and declared to then bank, and therefore the accrediting bank provides the payment guarantee in the event of the importer deciding not to purchase the goods or not making the payment.