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A Letter of Credit (L/C) is a payment method in international trade that ensures secure payment and delivery of goods between exporters and importers.
It relies on collaboration between banks, logistics providers, the exporter, and the importer to reduce risks and enable smooth cross-border transactions.
On my previous posts, I have not only made a definition of a letter of credit but also clarified its types and parties that involved in it.
You can also check the risks associated with letters of credit and sample letters of credit from my past posts.
On this post, I will try to explain letter of credit process in a very simple way.
After reading this article, you should understand the working mechanism of letter of credit payment in general terms.
Please click to download our article “Letter of Credit Transaction” as a PDF.
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