How Do Exporters Get Paid? Here’s How to Protect Your Money in Export Business!
One of the most important questions every exporter asks is:
“How do I make sure I get paid safely?”
The truth is, getting paid is the lifeline of your export business. No matter how good your product is—if the money doesn’t come in, your business won’t survive.
Let’s look at the 4 most common export payment methods and how they work:
1. Advance Payment
The buyer pays before shipment. This is the safest method for the exporter but is only common when you have a strong relationship or high trust.
2. Letter of Credit (LC)
This is a guarantee from the buyer’s bank. Once you submit the correct documents (Invoice, B/L, etc.), the bank releases payment. It’s very secure and ideal for first-time or large international deals.
3. Document Against Payment (D/P)
Your shipping documents are handed over only after the buyer pays. This is moderately secure but depends heavily on the buyer's willingness and financial stability.
4. Open Account
Goods are shipped before payment. This is high risk, only suitable for trusted, long-term buyers.
Tools & Tips to Protect Your Payments:
ECGC Insurance – Protects you from buyer defaults or non-payment
RBI-Authorized Banks – Always route your export payments through approved banks
Digital Platforms – Use SWIFT, PayPal, or Wise for small and quick transfers
Always sign a written contract with clear payment terms and deadlines
Smart Tip: Never rely on verbal commitments. Make everything formal.
Want a free export payment template? Drop a comment “EXPORT” and I’ll send it to you.
Paresh Solanki-International Export Import Trainer
How Do Exporters Get Paid? Here’s How to Protect Your Money in Export Business!
One of the most important questions every exporter asks is:
“How do I make sure I get paid safely?”
The truth is, getting paid is the lifeline of your export business. No matter how good your product is—if the money doesn’t come in, your business won’t survive.
Let’s look at the 4 most common export payment methods and how they work:
1. Advance Payment
The buyer pays before shipment. This is the safest method for the exporter but is only common when you have a strong relationship or high trust.
2. Letter of Credit (LC)
This is a guarantee from the buyer’s bank. Once you submit the correct documents (Invoice, B/L, etc.), the bank releases payment. It’s very secure and ideal for first-time or large international deals.
3. Document Against Payment (D/P)
Your shipping documents are handed over only after the buyer pays. This is moderately secure but depends heavily on the buyer's willingness and financial stability.
4. Open Account
Goods are shipped before payment. This is high risk, only suitable for trusted, long-term buyers.
Tools & Tips to Protect Your Payments:
ECGC Insurance – Protects you from buyer defaults or non-payment
RBI-Authorized Banks – Always route your export payments through approved banks
Digital Platforms – Use SWIFT, PayPal, or Wise for small and quick transfers
Always sign a written contract with clear payment terms and deadlines
Smart Tip: Never rely on verbal commitments. Make everything formal.
Want a free export payment template? Drop a comment “EXPORT” and I’ll send it to you.
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