Question

一道商务英语回答问题，麻烦各位帮帮忙。谢谢。

Why is L/C favored in international trade? 请用英语回答。十分感谢。

Answer 1

A Letter of Credit is a payment term generally used for international sales transactions. It is basically a mechanism, which allows importers/buyers to offer secure terms of payment to exporters/sellers in which a bank (or more than one bank) gets involved.

Letters of credit deals in documents, not goods. The idea in an international trade transaction is to shift the risk from the actual buyer to a bank.