How to use letter of credit for payment? It is not difficult to introduce the specific process

How to use letter of credit for payment? Recommended specific procedures for credit card payment. In the process of foreign trade transactions, the use of letters of credit for payment between enterprises is a common payment method. So, how does a company use a letter of credit to pay? What is the specific operation process?

Letter of credit payment process

1. The buyer and seller agree to use a letter of credit for payment;

2. The buyer notifies the local bank to open a letter of credit with the seller as the beneficiary. ;

3. The issuing bank requests the other party’s bank to confirm the credit card, and the other party’s bank notifies the seller that the letter of credit has been issued;

4. The seller receives the letter of credit and starts shipping the goods ;

5. The buyer gives the documents to the designated bank, which will review the documents according to the letter of credit, and a bank other than the issuing bank will send the documents to the issuing bank;

6 . The issuing bank verifies that the documents are correct, and the accepting bank pays according to the agreed time limit;

7. The issuing bank delivers the documents after the buyer pays, and the buyer takes delivery of the goods against the document.

What are the main constituent conditions and manifestations of letters of credit and credit card crimes?

The constituent conditions and manifestations of letter of credit crimes have the following characteristics:

1. The perpetrator is subjectively intentional, that is, he has the purpose of using the letter of credit to carry out activities and defraud property. Whether there is a purpose for property is an important distinction between this crime and the general illegal behavior of incorrectly using a letter of credit due to negligence or other reasons.

2． The actor must objectively carry out the behavior using the letter of credit. There are four specific forms: (1) Using forged or altered letters of credit or accompanying documents and documents. The so-called counterfeit letter of credit refers to the act of creating a fake letter of credit by imitating the format and content of the letter of credit through depiction, printing and other methods, or a fake letter of credit issued in the name of a fabricated or fraudulent bank. The so-called "altered letter of credit" refers to a letter of credit that is based on a genuine letter of credit and has altered the content and main terms of the original letter of credit by using methods such as alteration, cutting and pasting, and patching. "Accompanying documents and documents" mainly refers to transport documents, commercial invoices, insurance documents that must be used together with the documentary credit, and other documents that need to be attached, such as consular invoices, customs invoices, export licenses, and certificates of origin. Books etc. The "use" mentioned in this article includes forging or altering and then using it yourself, or forging or altering and providing it to others for use, or others forging or altering it for their own use. (2) Use a voided letter of credit. Mainly refers to the use of expired letters of credit, invalid letters of credit or letters of credit that have been declared invalid. (3) Fraudulently obtain letters of credit. It refers to the behavior of the perpetrator fabricating false facts or concealing the truth to deceive the bank into issuing a letter of credit. (4) Carry out letter of credit activities by other methods. For example, the actor uses the so-called "soft terms" letter of credit to carry out activities. The so-called "soft terms" letter of credit refers to deliberately creating some hidden terms when issuing a letter of credit, which actually gives the applicant or the issuing bank unilateral initiative, so that the letter of credit can be changed at any time due to the issuance of the letter of credit. It is terminated due to the unilateral behavior of the applicant or the issuing bank, thereby achieving the purpose of defrauding property.

Article 195 of the "Criminal Law" stipulates that a person shall be sentenced to not more than five years or criminal detention, and shall also be fined not less than 20,000 yuan but not more than 200,000 yuan; if the amount is huge or there are other serious circumstances, he shall be sentenced to five years If the amount is particularly huge or there are other particularly serious circumstances, the fine shall be not less than 10 years but not more than 10 years, but also a fine of not less than 50,000 yuan but not more than 500,000 yuan, or property may be confiscated. . According to the provisions of Article 199 of the Criminal Law, anyone who conducts letter of credit activities with a particularly huge amount and causes particularly heavy losses to the interests of the country and the people shall be punished, or may also be subject to confiscation of property.

Is a letter of credit a credit card?

A letter of credit (L/C) refers to a letter of credit issued by a bank (issuing bank) in accordance with the requirements and instructions of the (applicant) or on its own initiative , a written document that makes payment to a third party (beneficiary) or its designated party based on specified documents under the conditions of complying with the terms of the letter of credit. That is, a letter of credit is a written document issued by a bank with a conditional commitment to pay. In international trade activities, buyers and sellers may not trust each other. The buyer is worried that the seller will not deliver goods as required in the contract after making advance payment; the seller is also worried that the buyer will not pay after shipping or submitting shipping documents.

Therefore, two banks are needed as guarantors for both the buyer and the seller, to collect and deliver documents on their behalf, and to replace commercial credit with bank credit. The instrument used by banks in this activity is the letter of credit. A credit card is a special carrier card issued by commercial banks to individuals and organizations, which allows them to shop and consume with special entities and deposit and withdraw cash from banks. It is a special carrier card with consumer credit. It is in the form of a card with the name, validity period, number, and number of the issuing bank printed on the front. Cards containing the cardholder's name, etc., and a magnetic stripe and signature strip on the back. What we call credit cards now generally refers to credit cards only. In layman's terms, a credit card is a small loan payment tool provided by banks to users to consume first and repay later. That is, when your shopping needs exceed your ability to pay or you do not want to use cash, you can borrow money from the bank. This kind of borrowing does not require any interest or handling fees. A credit card is a certificate that a bank promises to lend you money. A credit card will tell you how much money you can borrow from the bank and when you need to pay it back. In addition, you can also withdraw cash directly from the ATM machine when there is no money in your credit card.

The difference between a letter of credit and a credit card

1-Letter of Credit (L/C) is a conditional commitment issued by the bank in accordance with the customer's requirements and instructions Written documentation of payment. Letter of credit is currently the most important and commonly used payment method in international trade. For more information, please refer to

2-A credit card is a loan certificate issued by a commercial bank or similar financial institution to an individual with a certain credit standing. The cardholder can obtain a certain amount of overdraft from the card issuer with the credit card. and provide corresponding financial services.

The characteristics of the letter of credit payment method are

The characteristics of the letter of credit payment method include: the letter of credit is a kind of bank credit; the letter of credit is a self-sufficient document; Document sales. Exporters only need to submit various documents that comply with the provisions of the letter of credit in accordance with the requirements of the letter of credit, and ensure that "the documents are consistent and the documents are consistent", then they can get payment from the bank.

Letter of credit payment is a major payment method in international trade. It is a settlement method in which the bank pays to the seller (exporter) on behalf of the buyer (importer) if the documents are consistent. The biggest advantage is using bank credit to guarantee payment.

Credit cards, also called credit cards, are credit certificates issued by commercial banks or credit card companies to consumers with qualified credit. It takes the form of a card with the name of the issuing bank, validity period, number, cardholder name and other contents printed on the front, and a magnetic stripe and signature strip on the back. Consumers holding credit cards can shop or consume at specially appointed commercial service departments, and then the bank will make settlements with merchants and cardholders. Cardholders can overdraft within the prescribed limit.

Credit card is a non-cash payment method and a simple credit service. A credit card is generally a plastic card with a length of 85.60 mm, a width of 53.98 mm, and a thickness of 1 mm. It is issued to the cardholder by the bank or credit card company based on the user's creditworthiness and financial resources. The cardholder does not need to pay cash when using the credit card to make purchases. Make further repayments. Except for some credit cards combined with debit cards, general credit cards are different from debit cards and ATM cards in that credit cards will not directly deduct funds from the user's account.

Credit cards are issued by commercial banks to individuals and organizations. They can use them to shop and consume with specially appointed organizations and deposit and withdraw cash from banks. They are special carrier cards with consumer credit. They are in the form of a card with the card issuing number printed on the front. Cards with bank name, validity period, number, cardholder name, etc., and a magnetic stripe and signature strip on the back.

A real credit card has the following characteristics: it is not encouraged to deposit cash in advance, consume first and repay later, enjoys an interest-free payment period, can repay in installments independently (with a minimum repayment amount), join VISA, MASTER Wait for international credit card organizations to make it universally applicable.

Main features

①Credit card is one of the fastest growing financial services today. It is an electronic currency that can replace traditional cash circulation to a certain extent;

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②Credit cards have both payment and credit functions. Cardholders can use it to purchase goods or enjoy services, and can also obtain certain loans from card issuers by using credit cards;

③Credit cards are high-tech products that integrate financial services and computer technology.

④Credit cards can reduce the use of cash;

⑤Credit cards can provide settlement services, facilitate shopping and consumption, and enhance a sense of security;

⑥Credit cards can simplify collection Reduce payment procedures and save social labor;

⑦Credit cards can promote product sales and meet social needs.

That’s it for the introduction of credit cards and letters of credit.