Tiểu luận môn thanh toán quốc tế payment instruments

PAYMENT INSTRUMENTS GROUP 5: Phạm Tâm Long Đào Trung Anh Nguyễn Tuấn Anh Vũ Nhật Anh Bùi Việt Anh Nguyễn Xuân Minh LECTURER: PhD.Nguyen Dieu Chi Hà Nội, ngày 17 tháng năm 2017 A CHEQUE Defenition Cheque is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or to the order of certain person or to the bearer of instrument Characteristics of Cheque - Cheque is an instrument in writing - Cheque contains an unconditional order Cheque is drawn by a customer on drawer’s bank Cheque must be payable on demand Cheque must mention exact amount to be paid Payee must be certain of whom payment is made Cheque must be duly dated by customer of bank Parties to a cheque Drawer: A drawer is a person who draws a cheque Drawee: A drawee is a bank on whom a cheuqe is drawn Payee: A payee is a person who is entitled to receive the payment of the cheque Indorser: When the holder transfer or indorses the cheque to anyone else, the holder become “indoser” Indorsee: The person to whom the bill is indorsed is called an “indorsee” Regulations to issue cheque - Have money in banking account; - Have money in paying account at the bank; - Issued cheque with value is less than the value of the account; - Check needs to have a heading; - Check date and time need to be written clearly Parts of a cheque - Name of your bank which is also called the "drawee bank" or paying bank - "Account Payee Only" crossing is a directive to the collecting bank to pay into the account of the payee - Payee is the person to whom the cheque is to be made Ensure that the name of the person is correctly spelt and written close to the words "pay to" Draw a line on the space after the payee's name to avoid alteration - Date of the cheque To be able to receive payment, the date must be the current date - The person who holds and presents the cheque at the bank It is advisable to cross out "or bearer" to avoid any stolen cheque from being paid out - The payment amount written in words The same value will be written in the box beside it Ensure that the amount in words and figures are written close to the words "Ringgit Malaysia" and "RM" printed on the cheque Do not leave any gap by drawing a line after them Make sure that the amount in words and in figures tally, otherwise, the bank will return the cheque - Your signature as the "drawer" of the cheque - Serial number of the cheque Each cheque has a different number for identification purposes - The drawee bank's state and branch code - Your current account number - The drawee bank's internal code for current account product Procedure of cheque payments - Cheque is transferred through a bank + Step 1: Seller deliver goods to buyer + Step 2: The buyer issue cheque to pay the transactions + Step 3: The seller present cheque at the bank + Step 4: The bank credits account for the seller + Step 5: The bank debits account for the buyer - Cheque is transferred through two banks + Step 1: The buyer issue cheque to pay the transactions + Step 2: The seller present cheque at seller’s bank + Step 3: The seller’s bank deliver the cheque to buyer’s bank + Step 4: The buyer’s bank debits account for the buyer + Step 5: The seller’s bank credits account for the seller + Step 6: The clearance between banks Types of Cheque - Based on payment method : + Cash cheque: A form of cheque only exchange for money over the counter in one of the bank’s branches + Certified cheque: A form of cheque for which the bank verifies that sufficient funds exist in the account to cover the cheque, and so certifies, at the time the cheque is written + Personal cheque: A form of cheque that you can write an amount of money on and sign in order to make a payment from your own bank account rather than the bank account of an organization - Based on verified beneficiary: + Named Cheque: A cheque where the name of beneficiary is wrote on it + Bearer cheque: A cheque where the money can be paid to any person who presents it to the bank, not just to a person named on the cheque + Order cheque: A cheque which is payable to a particular person The payee can transfer an order cheque to someone else by signing his or her name on the back of it - Another types: + Traveler’s cheque: Kind of an open type bearer cheque issued by the bank which can be used by the user for withdrawal of money while touring + Crossed cheque: Crossing is a popular device for protecting the drawer and payee of a cheque Both bearer and order cheques can be crossed Crossing prevents fraud and wrong payments Crossing of a cheque means "Drawing Two Parallel Lines" across the face of the cheque Thus, crossing is necessary in order to have safety Crossed cheques must de presented through the bank only because they are not paid at the counter • Generally, cheques are crossed when: There are two transverse parallel lines, marked across its face or the cheque bears an abbreviation "& Co "between the two parallel lines or the cheque bears the words "Not Negotiable" between the two parallel lines or the cheque bears the words "A/c Payee" between the two parallel lines A crossed cheque can be made bearer cheque by cancelling the crossing and writing that the crossing is cancelled and affixing the full signature of drawer • When a particular bank's name is written in between the two parallel lines the cheque is said to be specially crossed In addition to the word bank, the words "A/c Payee Only", "Not Negotiable" may also be written The payment of such cheque is not made unless the bank named in crossing is presenting the cheque The effect of special crossing is that the bank makes - payment only to the banker whose name is written in the crossing Specially crossed cheques are more safe than a generally crossed cheques Related regulations: - Global: Convention Providing a Uniform Law for Cheques (19 Mar 1931) - Vietnam: + Decision No.30/2006/QĐ-NHNN on check supply and use + Ordinance No.28/2005/PL-UBTHQH11 on foreign exchange control B Bill of Exchange Definition - An unconditional order written by an drawer (exporter) in structing a drawee (importer) or its agent to pay a specificed amount of money at a specific tine to a specific party (beneficiary) Thus it is the exporter’s formal demand for payment from the importer Main feature of Bill of exchange 2.1 Transferability - To be negotiable instruments + Must be payable to order or to bearer + Must have no marks indicating non-negotiable -> Ensure the liquidity of Bill of exchange If the BEs have mark indicating nonnegotiable, individuals not believe in them, so it leads lower liquidity of Bes - Proper transfer: + Endorsement “pay to order” draft + Handover or blank endorsement: blank draft -> The ability of transfer is shown by endorsement 2.2 Legal protection of payment - Holder has right to receive payment in due course - In due course, if the drawee dishonors the draft, payment must be made to holder by endorser or the maker -> Ensure the benefit of holder and increase the liquidity of BE -> BE is nogotiable instruments that is used popularly over the world The funtions of BE - Provide the granting of trade credit in lawful format - Facilities format evidence of the claim for payment from a seller to a buyer - Facibilities the seller with assess to finance by transfer BE to bank of financer through discount BE - Allows the financer, bank to have a convincing legal claim on the buyer or seller Elements of BE 4.1 Heading of BE:  The title must be Bill ofexchangeor draft 4.2 BE value : 4.3 Place of presenting draft :  If on the bill don’t have the address that present the placeof making this draft, there will be no effect on that bill ofexchange 4.4 Time of presenting draft :  The issuing dateof BE play an important role of deciding the time that presenting draft, it also determine the period of payment and check the consistency of the document 4.5 Time of draft payment:  Payment duration is the date that “drawee” has to pay the bill There’re types : + At sight of this first BE - which means “drawee” must have the responsibility to finish the payment right after receiving the draft + Time – Usance BE – The payment duration is the type of payment that must be finish in a certain time of period e.g : at x days after sight at x days after signs at x days after bill of landing date 4.6 Draft drawee : There will be types of payment: “collection payments” & “credit payments” • Collection payments: • + CLEAN COLLECTION : If a business has numerous bills he got from various debtors he may send these bills to his banker for collection purposes It should be remembered that, this is not discounting of a bill of exchange The bill is sent for safety and collection purposes The bank keeps the bill in its custody till the due date and on the due date, the bank will present the bill to acceptor After collecting the amount, the bank transfers the amount to the account of its customer (by giving credit to his account) The bank charges some nominal fee from the customer for service he rendered This is an expense for the customer and revenue for the bank + DOCUMENTARY COLLECTION: The exporter will have bank as collector but not just base on the bill of exchange The transaction must go with other good documentaries and also the BE, under condition that bank agree to show the documents when having importer’s acceptance on the bill of exchange Credit payments: highlighted sections above are only in the credit payment Any fees related to open letter of credit will be charged by the opener Bank that has to pay opening fees is next to the word “drawn under” Right under it is number and date of opening credit 4.7 Beneficiary:  The beneficiary is the last person who receive the amount of payment, it could be the exporter or one subject that exporter have pointed In the case of having bank as exchange record, the beneficiary could be bank According to the law of BE management in VN, the beneficiary must be commercial bank that authorized by the government 4.8 Draft drawer:  Is the party that issues a Bill of Exchange in an international trade transaction; usually the seller or exporter Endorsement of BE 5.1 Definition of Endorsement of BE: The drawer or holder of the bill may endorse (transfer) the bill in favor of his creditor for the clearance of his own debts A bill of exchange is a "negotiable instrument" i.e a document which is transferable by delivery without notice to the party liable (drawee) If the holder of the bill puts his signature on the back of the bill with a view to transfer the property contained in it (right to receive money from the acceptor), then he becomes endorser, and the person to whom the bill of exchange is transferred will become endorsee This procedure by which a bill is transferred from one person to another person for the settlement of debts is called "endorsement" 5.2 Type of Endorsement of BE: types: a Blank endorsement: Placing of only your company name and signature on the back of the bill of exchange without indicating the payee The effect of this is that it becomes payable to the bearer + The endorser just leaves their name + The endorser leaves their name with “pay to” or “pay to the order of any…” By this type of endorsement, the transfer don’t need any endorse, but transferred hand to hand -> who pick up the bill will definitely be the beneficiary of it b Restrictive endorsement: A restrictive endorsement or restricted endorsement places a limitation on the use of a check or other negotiable financial instrument The most common restrictive endorsement is the phrase For Deposit Only written along with the payee's signature on the back of a check Other wording for a similar restrictive endorsement might be Pay to the Order of Sample Bank for deposit to account #xxxx followed by the payee's signature Many companies endorse checks by using a rubber stamp containing this restriction c Without recourse endorsement: Is the way of adding “ without recourse” in the endorsement gap and the company that accepted the transfer can’t recourse the bill d To order endorsement: In this type of endorsement, the endorser points a person to be the beneficiary in a speculative way The transferor just need to sign and write “to order of Mr X” So the beneficiary in this case hasn’t been set clearly -> need to figure Mr X intension 6 Type of BE 6.1 Based on the issuer of BE: - Trade Bill of exchange: is issued by exporter, and require the importer to take a payment for the beneficiary - bank Bill of exchange: is issued by bank, and require the correspondent bank to take a payment for beneficiary 6.2 Based on attached documents: - Clean Bill of exchange: The taking a payment on BE without documents - Documentary Bill of exchange: The taking a payment on BE with documents that include documentary Against Payment (D/P) and documentary Against Acceptance (D/A) 6.3 Basel on transferability of BE: - Order Bill of exchange : This BE writes “pay to order” of beneficiary, and is transferd to other beneficiary by endorsement - Norminal Bill of exchange: This BE writes full name of beneficiary and does not have transfer ability by endorsement 6.4 Based on duration payment of BE: - At sight Bill of exchange - On demand bill of exchange: when the drawee has seen this BE, this person must have to take a payment - Time Bill of exchange - After sight BE: After someday or period since the drawee has seen this BE, this person have to take a payment Acceptance of BE: - After the draft was issued, it must be deliver for drawee so as to drawee accepts take a payment, with maturity- draft - Form of acceptance the draft : + Sign in the front of BE + Acceptance by separate document Procedure of BE payment: - At sight BE: Exporter delivers goods Exporter issues and entrust export bank to collect Importer pays through the Import Bank after seeing the BE - After sight BE: Exporter deliver goods and commercial documents Exporter issues BE and entrust the Bank to require importer to sign acceptance Exporter Bank return accepted BE to the Exporter Exporter Bank requests Importerto maturity BE Importer pays expense of BE, import Bank debits account of the Importer and export Bank credits account for the exporter C PAYMENT CARD I II Denifition A payment card is a device-usually an embossed plastic carrd-that allows its owner (the cardholder) to make an electronic payment Characteristics of using payment card Convinient and safe: reduces the need to carry cash or use an ATM Lost or stolen cards are quickly replaced and any unauthorized purchases are refunded Chip and PIN technology makes it difficult for an unauthorized person to use your card Payment card anf current account statements provide a record of spending to help manage finances Payment card are widely accepted and thus reduce the need to purchase foreign currency or travellers cheques III Types of payment card • Based on using place: Domestic card & International card • Based on issuer: Card is issued by financial organization & Card is issued by nonfinancial organization • Based on technology: Embossing card,Magnetic Stripe card & Smart card • Based on payment capacity: Debit card, Credit card & Cash card • Other types of payment card: Travel card, Entertainment card, Gold card, Standard card,… IV Procedure of card payment (1) Cardholder presents a card to pay for purchases (2) Merchant processes the card and transaction information, and request an authorization from the merchant bank (3) Merchant bank submits the authorization request to Card Member Interchange (4) Card Member Interchange Network sends the request to the Issuing Bank (5) The Issuing Bank validates the card and checks the information and send the transaction authorization information to Card Member Interchange Network (6) Card Member Interchange Network forwards the response to the merchant (7) Merchant receives the authorization response and completes the translation accordingly (8) Cardholder refunds money to the Issuing Bank The first few steps of going through credit card processing is for the buyer to submit his credit card for payment Then, instead of the merchant dealing with routing the data, Authorize.net manages the data to their respected areas Authorize.net then passes the transction information to the processor The merchant’s Bank Processor submits the transaction to the credit card network, such as Visa and MaterCard The credit card network routes the transaction to the bank that issued the credit card to the customer The issuing bank reviews the transaction based on the customer’s funds and passes the results to the merchant’s bank processor Then the processor relays the results to Authorize.net Authorize.net stores the transaction results and sends them to the website for the customer and merchant to see The merchant delivers goods or services to the buyer The issuing bank sends the appropriate funds for the transaction to the credit card network, which passes the funds to the merchant’s bank The bank then deposits the funds into the merchant’s bank account This is what is called a “settlement” and the transaction funds are deposited into the merchant’s bank account two to four business days later This is how Authorze.net processes transactions V Structure of payment card Issuing Bank Logo EMV chip (only on "smart cards") Hologram Card number Card Network Logo Expiration Date Card Holder Name Contactless Chip Magnetic Stripe Signature Strip Card Security Code D Promissory Note Definition - Promissory note is a legal instrument( more particularly, a financial instrument), in which one party( the maker or issuer) promisses in writing to pay in determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms If the Promissory note is unconditional and readily salables, it is callea a negotiable instrument - A promissory note typically contains all the terms pertaining to the indebtedness, such as the principal amount, interest rate, maturity date, date and place of issuance, and issuer's signature Circulation characteristics - As a promising tool to pay, is not a tool for money For easy circulation, need payment guarantee of a Reputable organization - As a promising tool to pay, there will be no payment acceptance like B / E - The importer draws the bill before the exporter delivers the goods - Term is specified - May be drawn by one or more signatories to commit payment to another - There is only one original Components of promissory note - The term "promissory note" inserted in the body of the instrument and expressed in the language employed in drawing up the instrument - An unconditional promise to pay a determinate sum of money; - A statement of the time of payment; - A statement of the place where payment is to be made; - The name of the person to whom or to whose order payment is to be made; - A statement of the date and of the place where the promissory note is issued; - The signature of the person who issues the instrument (maker) Related regulations - Global: + Convention Providing a Uniform Law of Bills of Exchange and Promissory Note (07 Jun 1930) + United Nations Convention on International Bills of Exchange and Promissory Note (09 Dec 1988) + Article 57 of the CCC 2005 - Vietnam: + Circular No.34/2013/TT-NHNN on domestic issuance of promissory notes, B/E, CDs and bonds by credit institutions, foreign bank braches + Circular No.16/2016/TT-NHNN amendments Circular No.34/2013/TTNHNN ... bill of landing date 4.6 Draft drawee : There will be types of payment: “collection payments” & “credit payments” • Collection payments: • + CLEAN COLLECTION : If a business has numerous bills... exporter C PAYMENT CARD I II Denifition A payment card is a device-usually an embossed plastic carrd-that allows its owner (the cardholder) to make an electronic payment Characteristics of using payment. .. “drawee” must have the responsibility to finish the payment right after receiving the draft + Time – Usance BE – The payment duration is the type of payment that must be finish in a certain time of