Payment Terms
Category: payment
Agreed conditions for when and how payment is made, e.g. Net 30, COD, or advance payment.
Payment terms are the conditions under which a seller requires payment from a buyer, specifying timing, method, and any discounts. Common international trade payment terms include T/T (30/70 split), LC (Letter of Credit), OA (Open Account), and COD (Cash on Delivery). Payment terms significantly impact cash flow, risk exposure, and buyer relationships in cross-border e-commerce.
Examples
- • Net 30 payment terms mean the buyer must pay within 30 days of invoice date; common for B2B transactions with established relationships.
- • A supplier offering 2/10 Net 30 gives a 2% discount if paid within 10 days, otherwise full payment is due in 30 days.
- • E-commerce platforms typically use instant payment (credit card/PayPal at checkout) rather than deferred payment terms.