Practice English Vocabulary Exercises – Vocabulary for Banking and Finance: International payments

A. Match the type of payment with the description, and choose the best word from each pair in grey type.

Four methods of payment for imports/exports

advance payment                                                bill of exchange

documentary credit (or letter of credit)          open account

a   …………………………………………….

The exporter sends the goods and ¹ documents / papers to the foreign buyer. The buyer pays the invoice when the goods arrive, or within a certain period from the invoice date. This can be risky, as the exporter trusts the buyer to ² respect / honour the original sales contract.

b   …………………………………………….

A foreign bank issues ³ a promise / an undertaking to the exporter (through a bank in the exporter’s country) to pay for the goods as long as the exporter ⁴ matches / complies with the conditions of the contract. This is a much safer form of payment for the exporter. To be even safer, the exporter can arrange for the bank in his/her country to ⁵ act as / be “confirming bank”, which means that the bank in the exporter’s country is responsible for the transaction.

c   …………………………………………….

A ⁶ legally-binding / legally-holding agreement that the importer will, on acceptance of the bill, pay the exporter for the goods. The risks are that the importer does not accept the bill even though the goods have arrived, or ⁷ doesn’t pay / dishonours an accepted bill when it ⁸ matures / is time to pay.

d   …………………………………………….

The exporter does not ⁹ send / dispatch the goods until payment has been received from the importer. There is no risk for the exporter – all the risk is ¹⁰ taken by / with the importer.

B. Put words below into the spaces in the sentences.

bill of lading          consignments          courier

defer          forwarded          import duty

issuing bank          payment on delivery          penalty

release          remit          remittance

shipment          shipped          tariffs

title          vessel          wire

1   We are expecting two …………………… of computer printers from China.

2   Another word for a consignment is a ……………………, even if it doesn’t travel on a ship.

3   The consignment …………………… ten days ago. I’m surprised you haven’t received it yet.

4   A detailed list of a ship’s cargo is called a ……………………

5   Another word for ship is ……………………

6   In many cases, when goods are imported, an …………………… has to be paid.

7   Another word for import duties is ……………………

8   A document proving that you own a consignment of goods is called a …………………… to the goods.

9   After payment, the bank will …………………… the title to the goods.

10   The bank took a long time to …………………… payment to my account.

11   If we don’t deliver on time, we’ll have to pay a late-delivery ……………………

12   We would like to …………………… payment until delivery of the shipment.

13   We usually ask our customers for ……………………

14   If there’s a problem with the letter of credit, I suggest you contact the ……………………

15   The quickest way to send money to another country is to …………………… it, for example, by Western Union.

16   Thank you for sending the …………………… by Western Union. I collected it this morning.

17   An effective way to ship consignments is to use a …………………… such as UPS, DHL or FedEx.

18   The exporter’s bank has …………………… the bill of exchange to the importer’s bank.