Advance Payment is a trade system where the buyer places funds at the disposal of the seller before shipment of the goods/services are done.


  • Payment is made before goods are delivered to the buyer
  • This method of payment is risky
  • Banks are involved only in the transfer of funds
  • Less expensive as compared with Letters of credit


  • Quick and secure means to transfer funds abroad
  • Customers have access to foreign currency at very competitive rates
  • Encourages the seller into a long-term trade relationship