Acceptance – Letter of Credit Consultancy Services

Availability of Letters of Credit

Ozgur Eker (CDCS) Acceptance, At Sight, Deferred Payment, Letter of Credit Basics, Negotiation, Payment Types of Letter of Credit 22 January 201815 February 2025Acceptance, At Sight, Available By, Available With, Deferred Payment, Negotiation

payment types in a letter of credit transaction

Updated on:

15 February 2025

Letters of Credit are flexible instruments because they incorporate various payment options.

According to letter of credit rules, a credit must state whether it is available by sight payment, deferred payment, acceptance or negotiation. (UCP 600 – Article 6- b)

The credit must explicitly indicate its availability as: (i) immediate payment (sight), (ii) payment at a future determinable date (deferred), (iii) acceptance of a time draft drawn on the issuing, nominated bank, or confirming bank, or (iv) negotiation with or without recourse to the beneficiary.

Sight payment ensuring prompt payment upon document compliance. Deferred payment, allowing for payment at a future date. Acceptance LCs involve the bank’s commitment to pay at a later date via draft acceptance. Negotiation LCs offer the possibility of receiving early payment by discounting drafts.