Payment is the part of a first order that stalls most often, and usually for a simple reason. The buyer wants to pay after the goods arrive and the seller wants to be paid before they leave. Both positions are reasonable. The instruments below exist precisely to bridge that gap, and knowing what each one costs and protects makes the negotiation short.
Telegraphic transfer
A bank-to-bank wire, usually split into a deposit against the proforma invoice and a balance against scanned documents before the originals are released. It is the fastest and cheapest method. Bank charges are modest, funds clear in one to three working days, and there is no documentary examination to fail.
The trade-off is that a TT gives the buyer no bank-held security. Protection comes from the split itself. A 30 per cent deposit with 70 per cent against scanned bill of lading and inspection report means the seller has committed to production before receiving most of the money, and the buyer has seen evidence of shipment before paying the balance. For a first order with a new supplier, that structure is the practical middle ground, and it is what we use for most Peivana trial shipments.
Cash against documents
The seller ships and then routes the original documents through the banking system. The buyer’s bank releases them only on payment, or on acceptance of a time draft. Without the original bill of lading the buyer cannot collect the container, so the goods stay under the seller’s control until payment is made.
CAD costs a little more than a straight TT and sits in between on protection. It suits repeat relationships where the parties know each other but have not moved to open account. Its weakness is that the seller has already shipped. If the buyer refuses the documents, the seller is holding a container at a foreign port with demurrage running, which is why sellers still prefer a deposit alongside CAD on early orders.
Letter of credit
An irrevocable documentary credit, ideally confirmed by a bank acceptable to the seller. The issuing bank undertakes to pay against documents that comply exactly with the credit terms. This is the strongest instrument for both sides, because payment depends on documents rather than on either party’s goodwill.
It is also the slowest and most expensive. Issuance, advising, confirmation and amendment fees add up, and on a single 20 ft load of ambient goods the cost can be meaningful against margin. The real risk is discrepancy. Banks examine documents strictly, and a mismatch as small as a description that differs by one word from the credit wording gives the issuing bank grounds to refuse. If you use an LC, send us the draft text before it is issued so we can confirm every term is one we can actually satisfy. Wording that calls for a document Egypt does not issue will simply block payment.
Open account
Payment 30, 60 or 90 days after arrival, with no bank instrument in between. It carries all the risk on the seller side and is offered only after a trading history exists, and normally with credit insurance behind it. Asking for open account on a first order is the single most common reason a new enquiry does not progress.
How the Incoterm interacts
Payment terms and Incoterms are separate agreements and should be written separately. The Incoterm sets who arranges and pays for carriage and where risk passes. Payment terms set when money moves. Under FOB the buyer books the vessel and pays freight directly to the line, so the invoice value is lower and the deposit is smaller in absolute terms. Under CFR or CIF the seller books, so the invoice carries the freight and any deposit percentage translates into a larger sum. That arithmetic is worth doing before you agree a percentage.
What we suggest for a first order
One container or a part load, TT with a deposit and balance against documents, third-party inspection at loading if you want independent verification, and a single clean specification. Move to CAD or extended terms from the second or third shipment once both sides have a record. Trial-size orders and the quoting process behind them are described in our note on same-day quotes on Egyptian produce, and part-load economics are covered in the guide to building a mixed fruit container.
Practical notes
Confirm beneficiary bank details by a second channel before wiring, never from an emailed invoice alone. Payment fraud in produce trading is real and it targets exactly this step. Agree who bears bank charges, sender or beneficiary, at order stage. And build two to three working days for clearance into your shipping timeline, because loading is scheduled against cleared funds, not against a transfer receipt.
To discuss terms for a first shipment, message the Peivana desk on WhatsApp at +20 10 9911 1918.