Saturday, December 16 2017

VietNamNews

Firms warned on int’l payment risks

Update: December, 06/2017 - 09:00
Vietrade holds a seminar titled “International payment in import-export activities” in HCM City on December 5 to help domestic firms understand the potential risks in international payments. — VNS Photo
Viet Nam News

HCM CITY — Vietnamese firms should study their trade partners carefully, choose suitable payment methods and buy exchange rate insurance to avoid risks when making international payment, a seminar heard in HCM City on Tuesday.

Bùi Thị Thanh An, deputy director of the Việt Nam Trade Promotion Agency (Vietrade), said Việt Nam trades with more than 180 countries and territories, with its main partners including the EU, US, Japan, ASEAN members, and China.

Together with economic growth, Việt Nam’s exports have also been increasing year after year, she said.

Its total trade rose 6.6 per cent last year to US$349.2 billion, she said.

“International payments are an inseparable part of import-export activities.

“But there are risks involved in international payments. Risks can arise at any stage during the transaction process and to any party – exporter, importer or bank.”

The seminar on “International payment in import-export activities” sought to help domestic firms understand the potential risks in international payments, she added.

The basic payment methods include cash-in-advance, letters of credit (LCs), collections, open account, and consignment, with LCs being one of the most secure.

Delegates said since 2013, businesses have reduced LC payments and switched to direct payments via wire transfer to reduce costs.

Nguyễn Thị Thu Hằng, deputy director of An Bình Commercial Joint Stock Bank’s international payment centre, warned that this method poses the risk of being attacked by cyber criminals.

People could attack the emails of sellers, buyers or suppliers and send fake wire transfer requests, she said.

Thus, when companies receive email requests for urgent payments, they must always verify the request via telephone, she said.

Talking about risks involved in payment, Bùi Quang Tín, lecturer at the Banking University of HCM City and CEO of Biz Light, said they include credit risk, ethic risk, national risk, and exchange-rate risk.

To reduce the risks, firms need to carefully study their business partners in terms of transaction history, prestige, products, services, payment capacity, bank issuing LCs and others, he said.

They should buy exchange rate insurance and chose appropriate payment methods, and consult legal and international payment experts, he added. — VNS

 

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