Thuyết trình môn thanh toán quốc tế assignment the term of payment

National Economics University International Payment ASSIGNMENT Topic: The Term of Payment • Nguyễn Văn Quý • Trần Thị Minh Ngọc • Nguyễn Bá Hùng • Đỗ Hương Giang • Nguyễn Thị Huyền Trang • Đặng Hải Linh • Phan Hà Anh Contents 1.Currency of Payments The payment currency can be any one of the following currencies: USD - US dollars AUD - Australian Dollars CAD - Canadian Dollars NZD - New Zealand Dollars GBP - British Pound EUR - Euro SGD - Singaporean Dollars… This will depend on which currency the client used to pay for the project; whichever currency was used will be displayed on the project's brief page Kinds of currency • • • • - Based on use place World currency International currency National currency Based on transference Free convertible currency Transferable currency Clearing currency Based on use purpose Payment currency Account currency Based on survive form Credit currency Cash Main factors effect to using kinds of currency in international payment • • • • Currency the client used to pay for the project Position of currency in international finance market Term and policy Business sector currency is used Obligation • If a monetary obligation is expressed in a currency other than that of the place for payment, it may be paid by the obligor in the currency of the place for payment unless - That currency is not freely convertible - The parties have agreed that payment should be made only in the currency in which the monetary obligation is expressed • If it is impossible for the obligor to make payment in the currency in which the monetary obligation is expressed, the oblige may require payment in the currency of the place for payment • Payment in the currency of the place for payment is to be made according to the applicable rate of exchange prevailing there when payment is due • However, if the obligor has not paid at the time when payment is due, the obligee may require payment according to the applicable rate of exchange prevailing either when payment is due or at the time of actual payment 2.Time of payment : a Payment before delivery: - This is the form of payment immediately after signing the contract or after exporter accepts the order of the importer, importer pays part or all of the contract amount a1 Importer pays exporter in advance X days from the date of signing the contract, or after the effective date of the contract - Importer provides credit, advances payment to exporter that facilitae to get enough capital to export their goods - Time of advance credit for export is calculated from the date of advance payment to the date exporter refunds the advance The amount of advance payments depends on the demand of exporter and the ability of providing credit - Price of contract in advance payments is lower than price of contract in payment delivery This difference is the interest arising on the advance amount that the seller will have to reduce the price for the buyer Formula to calculate : Pe= Pe : Discount Price Pu:Deposit Value R: Interest of credit period ( year, month) N : Time to provide credit to exporter from importer Q: Quatity of contract goods Ex : A contract valued at 500.000 USD with 1000 ton, a payment of 20% contract value will be made by buyer before months, interest is 5% Calculate the price discount the buyer can get at ton Solution : Pu = 500.000 x 20% = 100.000 R = 5% N = months Q = 1000 ton Pe = = 34$ => Meaning : With ton buyer will be discount prices 34$ a2 Importer pays exporter X days before delivery date - Meaning: Ensure the performance of the contract of the importer - Delivery date is the first delivery date specified in the contract - Short -term for payment: 10-15 days Exporter will only delivery goods upon receipt of the notice of advance payment - No interest applied In case 1: The amount depends on higher than normal contract price: Pu= Q (PH – PT) Pu : Payment in Advance Q : Quality of good PH : Higher contract price PT: Normal price In case : Buyer's creditworthiness - Seller don’t believe in avaiable payment of buyer and require buyer advance payment related to banking Pu = THĐ [ (1+R)N -1] + Tr Pu : Payment in Advance THĐ : Total contract amount N : Duration Tr : Penalty in case of nonperformance b Payment at delivery Buyer pay money on shipment - The buyer pays the seller immediately after fulfillment of the delivery obligation According to Incoterm 2000 of ICC: EXW : Seller completely delivery in their place: warehouse, factory,… FAS : Seller completely delivery when the goods placed alongside ship but didn’t pick up in ship DAF : Seller completely delivery at frontier FCA : Seller completely delivery when the goods deliveried for carrier - After seller successfully delivery, buyer is reported and will be payment After successfully delivery on transport - The buyer pays the seller immediately upon fulfillment of the delivery obligation on the means of delivery of the place of delivery of the goods Ex : FOB : on board FOD: At the seaport - After receipt of the bill of lading by the owner of the means of transport, the buyer is notified of the payment immediately Payment on Documents : - The buyer pays immediately to the seller immediately after receipt of payment documents from the seller There are ways: + At sight + Pay within to days of seeing the vouchers P/D : An arrangement under which an exporter instructs the presenting bank to hand over shipping and title documents (see document of title) to the importer only if the importer fully pays the accompanying bill of exchange or draft Also called cash against documents Payment on Receip The buyer pays to the seller immediately upon receipt of the goods at the designated place or port of destination The regulation may be in the buyer's country after the goods have been assessed, at the place of the seller's country, the name means of transport of the buyer c Payment after delivery - After a certain time after exporter has completely delivery obligations as agreed in the contract, then importer will payment + Buyer payment after certain number of days from the date of receipt be informed of seller has completed delivery obligations at the place of delivery specified + After a certain number of dates have been agreed upon since exporter has assigned finished goods to importers in the place of delivery specified + The pay was carried out after a certain number of days from the date of importer get documents + The buyer payment after certain number of days from finished goods => Paying after delivery helps remove the risk in shopping receive the goods and check it before actually paying, with no interest charged => Pay After Delivery is only available for a unspecified number of transactions at a time, and that number is unique to each users specific account - Additionally, not every transaction will be eligible for pay after delivery, just as not every transaction is eligible for card funding *PayPal's situation: - Buy now pay later changed that It meant established buyers with very little disposable income were still able to take advantage of any eBay bargains they could find without having to worry about paying for them before pay day - If it were really solely intended to boost buyer confidence it wouldn't only be available to established buyers with verified accounts It would be available to any new user who had verified their bank account - it isn't - it's invitational, and effectively ''subject to status'' (although history would be a more appropriate term than status because we're talking about account status, not financial status) - It's marketing genius on PayPal's part Our year on year sales on electronics are up 32% for the period 9th December to 23rd December - Of course it gives buyer confidence on big ticket items, I have no doubt it was meant to Of course it's cheaper for PayPal themselves because they don't have to pay the merchant fees, I have no doubt that was intentional too, but the primary purpose (in my humble opinion) was to increase sales during the periods of the month when buyers have previously been inactive because they were waiting for their pay More sales = more revenue = more consistent traffic Place of payment The question of w here payment should take place must be defined, since it determines the fulfilment of the obligations of the buyer This also relates to what form of payment is used L/Cs are normally payable at both the issuing or the advising bank: the respective back takes responsibility for transferring the payment after the documents have been approved The situation is similar when a documentary collection is used as the method of payment the difference being that the buyer has fulfilled their obligations when paying or accepting a bill of exchange against the documents at the collecting bank It s then up to this bank to transfer the payment according to the instructions originating from the seller In the relatively few cases when payment by cheque is agreed upon, it must be made clear whether the seller will accept a commercial cheque or a bank cheque (also referred to as a banker's draft) It is up to the parties to decide if the buyer's obligations have been fulfilled when the cheque is sent, when it has been received by the seller or when it has been cleared in the banking system and the payment is available to the seller as cleared funds In the case of bank transfer, the place of payment must be decided by the parties involved The seller wants the payment to be received by their bank before accepting that the buyer has fulfilled their payment obligations, whereas the may consider their obligation to have been fulfilled when they pay the amount a their local bank The question of where the buyer fulfils their payment obligations in connection agreement is payment terms is always a matter for the parties to agree If no such the applicable made, disputes may arise later on, and may then to be decided by law In most have the domicile of the creditor, countries, the law stipulates that the debt should be paid at namely the seller It is therefore also in the buyer's interest that the place of payment is stated in the terms of contract, particularly with larger amounts, when every day when interest can be earned may be of importance Methods of payment Payment can be devided into two main categories - Clean payment is the buyer must pay according to the contract after receiving the seller’s invoice specifying the payment date - Documentary payments are used in situations other than those mentioned above, when the need for additional security is grater The documentary payments are divided into documentary collections, when the buyer has to pay or accept a bill of exchange in order to obtain access to the documents for collection, or LCs where the seller also is guaranteed payment if the documents presented are in accordance with the terms of the LC ... fulfillment of the delivery obligation on the means of delivery of the place of delivery of the goods Ex : FOB : on board FOD: At the seaport - After receipt of the bill of lading by the owner of the. .. require payment in the currency of the place for payment • Payment in the currency of the place for payment is to be made according to the applicable rate of exchange prevailing there when payment. .. export their goods - Time of advance credit for export is calculated from the date of advance payment to the date exporter refunds the advance The amount of advance payments depends on the demand of