How to pay a supplier from another country safely

When you start to make international payments To suppliers, the first question is: How do I pay without risking my money or delaying the order?

If you choose poorly, you may experience scams, delays, or loss of merchandise.

If you choose well, your operation flows smoothly, the supplier feels secure, and you maintain control.

In this guide, we explainthree forms of payment —transfer in parts, letter of credit yescrow— with plain language, real-life examples, and concrete steps.

The goal is for you to decide with confidence and haveready texts to include in your contract.

• First order o risk country → prioritize letter of credit o escrow.
• Known supplier and amounts low/medium → transfer in parts pruebas.
• Decide with 3 factors: imported, country risk y confidence at the provider.
• Always add: Clear Incoterms, quality tests y, if there is merchandise, Safety.

What’s at stake when you pay abroad?

Paying abroad isn’t like a local transfer. They intervene.correspondent banks, changes ofcurrency, shipping times ycommercial culture.

The supplier wantscollect safely; you want to paywhen what was agreed upon is fulfilled.

The key isalign incentives: that the supplier has reasons to comply and you have tools toverify before releasing the money.

That is why the payment methods are complemented withdocuments (shipping receipt, inspection, quality certificate) and clear rules (Incoterms).

What each “pillar” of foreign trade covers (and what it doesn’t)

• Incoterms 2020 (ICC): standardize tasks, costs and risks in delivery between seller and buyer; the current edition is in force from January 1, 2020They don’t set payment, precio, or transfer of ownership (that’s in the contract).
• Letters of Credit (LC): are governed by UCP 600 (ICC) and the practical guide ISBP 821 (2023) for documentary examination. The LC is a bank’s commitment to pay if the submission of documents complies what was agreed upon. It can be requested confirmation from another bank if there is country/issuing entity risk. (If you operate with electronic documents, the supplement applies eUCP 2.1).
• Proof of Shipping/Delivery: depending on the mode, it is usually used BL (maritime) o RCM (road). El WRC Convention governs international road transport between contracting States and their e-CMR Protocol allows the electronic note.
• Bank identifiers: IBAN (standardized account format) y BIC / SWIFT (entity identifier). SWIFT publish the IBAN Registry and is the BIC registration authority, used to process cross-border payments correctly.

Quick comparison (decide in 1 minute)

Option	What is	Seguridad	Rib	Speed	When to use	Risk if it goes wrong
Transfer in parts	You pay directly, divided into phases	Media	Low	High	Known supplier, low/medium amounts	Difficulty in recovering money
Letter of credit	Your bank only pays if there are correct papers	High	High average	Media	First order, high amounts, risk country	Documentary errors delay collection
Escrow	A third party keeps the money and releases it with evidence	High	Media	Media	One-off operation or new supplier	Poorly written instructions cause disputes

How to choose without technicalities (decision tree)

How much money is it?

<15.000 € → Transfer in parts if there is trust; if it is a suppliernewusecustody.

€15.000–100.000 → If the country islow/medium risk and there is some confidence, custody oSimple LC; if it is new or the country ismedium / high, LC.

> 100.000 € → As a rule, LC. If not applicable, custody with strict inspection and milestone payments.

What is the risk of the supplier’s country?

Low (EU, USA, etc.) → more margin for transfer in parts or custody.

Medium / High → Increase protection: LC (betterconfirmed if the bank or country does not inspire confidence).

Do you know the supplier?

1. New → part with LC o custody.
2. Known with history → you can use transfer in parts adding pruebas before the balance.

Can you do pre-inspection or testing?

Sí → include it aspayment condition (in LC as a document; in custody asmilestone).

Quick glossary (no jargon)

• Letter of Credit (LC): your bank pays the supplier solo if you present the correct papers.
• LC confirmed: in addition to the issuing bank, another reliable bank also guarantees payment.
• Escrow: A third party holds the money and releases it when the payment is made milestones.
• Shipping Receipt (BL/CMR): document proving that the merchandise he left.
• Inco terms: rules that assign costs and risks of transport.
• Milestone Payments: you pay split according to verifiable progress.

Frequently Asked Questions (preguntas frecuentes)

Is the transfer secure?

It is yesyou pay in parts, you check theaccount and you demandpruebas before the balance. For new suppliers, it’s bettercustody oLC.

When is it worth opening a letter of credit?

Enfirst order, high amount orisk country. It gives security to both parties if the text is well written.

Does custody apply to physical merchandise?

Sí. It works very well if you definewhat test releases payment (inspection, BL, delivery/commissioning).

What happens if there are errors in the LC papers?

Are considereddiscrepancies and the bank cannot to pay until corrected; it is advisable to make a short list and coordinate with theforward, FollowingISBP 821.

Should I request a confirmed LC?

Sí, if theissuing bank ocountry They do not inspire confidence: confirmation adds the commitment of asecond bank solvent.