Letter of Credit (LC) Platform
Many international companies insist that they will purchase the goods through LC, specially for large dollar amount purchase. Large amount is subjective and depends entirely on the buyer. In most cases, if the seller doesn't agree to the payment through LC condition, he will lose the sale.
What is LC?
In an LC transaction, buyer opens an LC with a bank in his home country. That means that the buyer's bank will require a payment from the buyer before goods are shipped by the seller (normally, it is done right after Purchase Order is raised by the buyer). In return, buyer will ask that the payment be made to the seller only when the seller meets certain conditions, known as "LC conditions." These LC conditions typically mean that the seller must provide the buyer with the documents such as proof of shipment document, warranty certificate, country of origin certificate etc. Prior to issuing a PO, buyer and seller should decide what those LC conditions should be. Once buyer's bank receives the payment and the LC conditions document from the buyer, buyer's bank can open and LC.
Accepting payment through LC means extra work and cost for the seller. Seller has to then find an advisory bank in the US (it doesn't have to be the bank where seller's account is open) who can coordinate with the seller for the LC documents and also receive payment from buyer's bank. Seller should let the buyer know before LC is opened who the advisory bank will be.
It is because of these reasons that many US sellers don't want to accept the payment through LC, often it comes at the cost of not sellng their goods.
LC Managment Platform from netpaymentservice.com (NPS)
NPS's LC Management Platform is a one-stop platform where US vendors can outsource their LC advisory process. This saves them time and since NPS has relationships with US banks that offer advisory services, we are able to reduce the LC cost by as much as 40%.
NPS’s Advisory LC Management Procedure For US Manufacturer (USM):
NPS benefits to the seller and NPS's advantage over other companies that provide LC management service
Note: LC Platform from Net Payment Service is currently available only to the US manufacturer (shipment can be done from anywhere in the world). International manufacturer/vendors need to do LC without Net Payment Service's assistance.