International Banking Services are vital to the businesses interested in the import
export trade. Sooner or later, you will need to figure out how to pay and get paid
from your counterparts with multiple currencies around the globe. International
Banking Services handle all the international payments for importers and exporters
from documentary collections to letters of credit. International banks have relationships
with local domestic banks and banks from other countries which makes them a great
resource. Within the United States alone, there are 300+ banks with an international
department waiting to serve you.
As a business importing from China, there are international banking services that
you should be familiar with. Such services range from: foreign exchange, movement
of finances across borders, a source of information and connections, and other general
One of the challenges of the import export business is dealing with
multiple currencies. The exchange rates are constantly fluctuating. If you are an
importer from the United States, the best way to eliminate concerns on exchange fluctuations
is to have quotes made in U.S. dollars and establish payments in U.S. dollars. This
is possible due to the broad acceptance of the U.S. dollar worldwide. Depending
on what country is considered your home country, you may be able to adapt this method
of payment or receipt of funds in your local currency.
If your import export business
partners prefer to be paid in a foreign currency, then consulting an international
bank to obtain foreign exchange advice is advisable particular if the monetary value
is large. International Banks can offer currency hedge as one of its services. The
bank will offer to you the option of buying forward or futures contracts for a specified
amount of a certain currency at a future date.
Movement of Finances across Borders
One of the obstacles to international trade is
trust. It is understandable that an exporter is suspicious of an importer's willingness
and ability to pay. Unless relationships have been established, it is unlikely that
the exporter will allow the importer to pay by using an open account or credit basis.
Under this situation, the seller simply bills the buyer after the delivery of the
A more secured form of payment will likely be required. This could take place
in the form of prepayments where the importer pays the exporter prior to receipt
of the goods. However, the importer bears all the risks in this situation.
balanced approach is the use of Documentary Letters of Credit or Drafts. This involves
the use of third parties or intermediaries to ensure that payments are made and received
in a timely manner. The documents need to be submitted before payments can occur.
approach called the Import Letter of Credit is a bank's written promise of paying
the exporter once the importer receives the goods.
3. Source of Information and Connections
Your International Bank has comprehensive information and connections services which
will benefit you as the importer tremendously. The bank may have international connections
for you to investigate. Minimally, the bank should be able to write you a letter
of introduction for you to establish a credible relationship with a foreign bank
in the country of origin. The International Bank can also check your potential supplier's
credit worthiness. Market reports both domestic and international should also be
available through your bank.
4. Other General Banking Services
An International bank has the services to fulfill all your business needs. They range
from providing short and long term credit, taking your deposits and executing payments
and providing business credit cards.
International Banking Services are vital to the success of the import from China
business person. Make sure that you take advantage of this great resource.