๐ฆ Trade Communication
Global Payment Risk Guide
High-risk countries and scam prevention. All calculations run locally in your browser โ free, instant and private.
๐ก Mitigation advice
- Switch to advance T/T or sight L/C; raise deposits above 50%
- Insure with Sinosure and stay within the approved buyer limit
- Avoid D/A and O/A with new buyers; run credit checks (D&B, customs data)
- Beware the classic pattern: smooth sample order, then a big credit request
๐ Payment method risk reference (exporter view)
| Method | Risk | Key point |
|---|---|---|
| 100% T/T in advance | Minimal | Cash before goods; near-zero risk โ offer 30/70 if buyer resists |
| 30% deposit + 70% before shipment | Low | Never telex-release the B/L before the balance lands โ the classic scam point |
| L/C at sight | Low | Paid on compliant docs; watch for soft clauses and issuing-bank quality |
| Usance L/C | Medium | Ties up working capital; discounting costs must be priced in |
| PayPal / platform escrow | Medium | Great for small orders; chargeback risk makes it unsuitable for large amounts |
| D/P โ documents against payment | Med-high | Buyer pays to release docs at destination; refused cargo traps your goods |
| D/A โ documents against acceptance | High | Acceptance releases goods โ an open account in disguise; frequent bad-debt source |
| Open account (O/A) | Very high | Full credit terms; only for deeply insured, long-term buyers |
๐ Risk Guide Guide
Four dimensions of collection risk: method, tenure, country and amount
Payment method is the first driver of exporter risk. 100% advance T/T is nearly risk-free; the 30/70 deposit-balance split is the workhorse, with one iron rule: never telex-release the B/L before the balance lands. Sight L/C relies on bank credit and pays on compliant documents; usance L/C ties up capital and depends on the issuing bank. D/P already carries real risk (refused cargo strands your goods), D/A is an open account in disguise, and O/A is where bad debts concentrate.
The other three dimensions amplify or hedge method risk: first-order buyers default far more often than five-year accounts; countries differ sharply โ OECD markets have deep FX and working courts, while parts of Africa and South Asia face FX controls or instability; and amount sets the absolute stakes โ D/A on a $10K trial is a bet, O/A on $200K can sink a small exporter.
How the scoring model works
Pick payment method, relationship length, country tier and amount band; the tool computes a weighted 0-100 score: under 35 is low risk โ proceed normally; 36-60 is medium โ insure with Sinosure short-term cover (~0.3โ1%) and enforce balance-before-release; over 60 is high โ switch to advance T/T or sight L/C, raise deposits above 50%, and stay within the Sinosure buyer limit.
The score assists but discipline protects: keep PI/CI/PL/B-L consistent; run credit checks (D&B, customs data, court records) before large open-account requests; and beware the classic pattern โ a smooth sample order followed by a big credit request.
โ FAQ
Is export credit insurance worth it?
Yes for medium/high-risk markets or credit terms. Sinosure-style short-term policies cost ~0.3โ1% and indemnify 80โ90% of nonpayment within the buyer limit โ one bad debt usually outweighs years of premiums.
How do I counter a 60-day open-account demand?
Concede in steps: quote O/A with financing cost baked in (8โ12% p.a.); then offer terms within an insured credit limit; otherwise prepay the first orders and grow the limit with trust.