Foreing Tradeand Finance: Import in Advance

Advance payment is a payment method in which the price of goods is collected in advance prior to the shipment of the goods which are subject to import and the exporter ships the goods, the payment of which is already made, to the importer later on. In this payment method, there is a credit granted by the importer to the exporter.

Advance payment has the highest risk for the importing companies. However; it also provides the opportunity of importing with the advantage of advance payment discount  because the price of goods is paid in advance. You can make import payment in advance from all Aktif Bank branches through your order in which you make and explanation that it is an import price in advance.

You can make a faster payment by indicating the following information in your order.
-Title and address of the Purchaser
-Title, address and Swift code of the Purchaser's bank
-Purchaser's bank account (IBAN, if any)

How Does It Work?
Importer makes the payment prior to the receipt of the goods.
Exporter gets the money and then sends the goods to the importer.

1.Do not inspect loading documents.
2.Do not get into the liability of payment.
3.Do act independently from sales contract.

Its Advantages
1.Low cost – it enables cost controlling with the help of low expenses of the banks
2.It's a simpler and easier payment method compared letter of credit.
3.It provides guarantee to the exporter.

Its Disadvantages
Importer faces the risk of not receiving the goods for which it has made a payment.