Import and export payments

Published by:
Netherlands Chamber of Commerce, KVK
Netherlands Chamber of Commerce, KVK
Netherlands Enterprise Agency, RVO
Netherlands Enterprise Agency, RVO

If you trade internationally, it is important to make clear payment agreements. There are several payment methods for international trade when you import or export goods, such as the Letter of Credit (L/C). You can reach an agreement about the moment of payment, collateral costs, and risks for the buyer and the supplier. Common international payment methods can vary per country as well.

If you are going to import or export, you can use different payment methods. These differ in the timing of payment, additional costs, and risks for you and your customer. Payments can vary by sector and country.

Blank payments

There are 2 kinds of blank payments:

  • Blank payment before delivery The buyer pays the supplier in advance, ensuring that the supplier gets their money – but the buyer runs the risk that the supplier does not deliver
  • Blank payment after delivery (open account) The supplier sends an invoice after the goods have been delivered. You agree upon a payment term beforehand. In this case, the buyer is certain to receive the goods, but the supplier has no guarantee that they will get paid

Bank guarantee

With a bank guarantee, the importer's bank guarantees payment. If the importer fails to pay as agreed, the importer's bank pays the exporter. A bank guarantee is not a payment method, but a security deposit. The exporter can enter into a penalty clause with the importer and the bank. If the exporter fails to deliver as agreed, the importer can receive financial compensation. The exporter's bank then acts as a guarantor.

Documentary collection

Documentary collection gives both the exporter and the importer more security. This form of payment is often used when business partners do not yet know each other well.

An exporter opens a documentary collection with the bank and sends trade documents. For example, the transport documents, invoice and insurance policy. The bank then sends these documents to the importer's bank. The importer needs these documents to dispose of the goods.

There are 2 types of documentary collection:

  • Documents against Payment (D/P) Importers get the trade documents only when they have paid
  • Documents against Acceptance (D/A) Importers get the documents after accepting the corresponding bill of exchange. The bill of exchange is a document stating that the importer promises to pay when due.

Letter of Credit (L/C)

A Letter of Credit (L/C) is an obligation by the bank to pay out a certain amount on a certain date. Importers open a Letter of Credit with their bank. The bank waits for the exporter's bank to fulfil the conditions in the L/C. For example, sending the trade documents. Then the bank pays the amount to the exporter's bank.

A Letter of Credit includes price agreements, the date of shipment, transport documents, and the time of payment. This payment method is also known as documentary letter of credit or documentary credit.

A Letter of Credit is the most reliable, but also the most expensive form of payment. Therefore, it is often used in large transactions. Or when importing from a country with a less stable economy. Read more about the Letter of Credit on

Payment by cheque

When paying by cheque, the exporter submits the importer's cheque to the bank and gets paid. Payment by cheque has risks. For example, does the importer not have enough money in their bank account? Or does the cheque turn out to be forged? Then the bank can reclaim the amount paid from the exporter. Not all banks process cheques. Check with your bank about what is and is not possible.

Foreign currencies

If you trade with a country that uses a different currency than the Euro, you incur a currency risk. The other currency may suddenly go down in value. Together with your bank, take measures to limit the negative consequences of currency changes. For example, with a currency clause in your price quotation or a currency term transaction.

Disputes about delivery or payment

Do you have a dispute about the delivery of the goods or the payment? There are several ways to try and solve these business disputes.

Questions relating to this article?

Please contact the Netherlands Chamber of Commerce, KVK