A:Well,we’ve settled the question of price,quality and quantity.Now what about the terms of payment?

B:We only accept payment by irrevocable letter of credit payable against shipping documents.

A:I see.Could you make an exception and accept D/A or D/P?

B:I’m afraid not.We insist on a letter of credit.

A:To tell you frankly,a letter of credit would increase the cost of my import.When I open a letter of credit with a bank,I have to pay a deposit.That’ll tie up my money and add to my cost.

B:Consult your bank and see if they will reduce the required deposit to a minimum.

A:Still,there will be bank charges in connection with the credit.It would help me greatly if you would accept D/A or D/P.You can draw on me just as if there were a letter of credit.It makes no great difference to you,but it does to me.

B:Well,Mr.Schmidt,you must be aware that an irrevocable letter of credit gives the exporter the additional protection of the banker’s guarantee.We always require L/C for our exports.And the other way round,we pay by L/C for our imports.

A:To meet you half-way,what do you say to 50% by L/C and the balance by D/P?

B:I’m very sorry,Mr.Schmidt,but I’m afraid I can’t promise you even that.As I’ve said,we require payment by L/C.