International Payment in Vn

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Methods of International Payment in Vietnam | May 11
2012

| ACB|

ASSIGNMENT:
DOCUMENTARY COLLECTION IN ASIAN COMMERCIAL BANK (ACB)

I. The necessary of international payment
1. Definition:
International payment is the process executing obligations to payment and entitlements to benefits of money which results in economic and non-economic activities between organisations, individuals of different nationalities or between a nation and an international organisation through banks of related partners. 2. Roles of international payment

For the economy
International payment activity plays an important role in the economic development of the country. A country cannot develop with closed policy, or only basing on the internal accumulation and exchange. It must develop comparative advantages and combine the power of the country with the international economic environment. In the current context when countries are putting external economic forefront, considering the external economic activity as the essential way in the development strategy of national economic activity, the role of international payment is increasingly confirmed. International payment is an important link in the chain of national economic activities. International payment is an important step in trading goods and services between individuals and organizations of different countries. This contributes to settling the relationship between commodity and currency, creating a continuous production process and hastening the circulation of goods process on an international scale. If international payment activities are conducted fast and safe, the circulation of goods and monetary between buyers and sellers will be smooth and more secure. International payment increases economic exchanges relationships between countries, makes the payment process fast, safe, convenient and reduces costs for participants. Besides, international payment activity increases the volume of non- cash payments in the economy, and attract a significant amount of foreign currency into Vietnam. For customers

The role of payment intermediaries in the international payment activity of commercial banks makes the payment process requested by clients will be conducted quickly and accurately, safety, conveniently and cost savings up.In the process of making payment, if the customer does not have enough financial resources and needs financial support from the bank, the bank will discount the documents. By making a payment, the bank can monitor the business situation of enterprises to give advices to clients and customers and to adjust strategies. For the banks

International payment is an activity related to the bank's balance- sheet assets. International payment activity helps banks satisfy better the needs of customers for financial services related to international payment. On that basis, banks increase revenue, improve the bank's reputation and build up the trust of customers. It not only helps banks to expand their scale of operation but also be an advantage to form the competitiveness of bank in the market mechanism. International payment activity is not only a single activity but also a support activity to trading activities of banks. International payment activities being done well will extend credit for import-export operations, develop foreign exchange operations, bank guarantees in foreign trade, trade finance and other international banking activities. International payment activity increases liquidity for banks. When conducting the international payment operation, banks can obtain foreign funds which are temporarily idle of businesses that in relationship with banks under form of escrow pending payment. International payment also creates good conditions to the modernization of banking technology. The banks will apply advanced technology to operate international payment be done quickly, promptly and accurately, in order to spread risk, contributing to expansion...
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