Money & WorkHow it works
How two strangers trade across 10,000 kilometres.
With a documentary letter of credit, the importer's bank gives a payment promise. The exporter ships, submits the agreed papers, and the bank checks only those documents – never the goods. If they match, it pays. The ICC's UCP 600 rules govern the process.
Useful: The price of that safety: one typo in a document can stop payment even though the cargo is perfect.
Source: de.wikipedia.org