Which term is a payment method used in international trade that allows the importer a period of credit?

Which term is a payment method used in international trade that allows the importer a period of credit?

• A. Telebanking
• B. Bills of Exchange
• C. Profit
• D. M-Money

Answer: (B)

In international trade, some payment methods give the importer a period of credit. A Bills of Exchange is a written order from the exporter directing the importer to pay a stated amount at a future date. This creates a deferral of payment, often described as a usance period (for example, 30, 60, or 90 days after the bill date). The instrument can be discounted or accepted through a bank, providing liquidity to the exporter while offering the importer time to arrange funds. Telebanking is about transferring funds electronically and doesn’t inherently provide a credit term in the trade transaction. Profit is a financial result, not a payment method. M-Money refers to digital/mobile wallet payments, which also don’t establish a formal credit period in international trade.

In international trade, some payment methods give the importer a period of credit. A Bills of Exchange is a written order from the exporter directing the importer to pay a stated amount at a future date. This creates a deferral of payment, often described as a usance period (for example, 30, 60, or 90 days after the bill date). The instrument can be discounted or accepted through a bank, providing liquidity to the exporter while offering the importer time to arrange funds.

Telebanking is about transferring funds electronically and doesn’t inherently provide a credit term in the trade transaction. Profit is a financial result, not a payment method. M-Money refers to digital/mobile wallet payments, which also don’t establish a formal credit period in international trade.