Order Payment Charges refer to various bank fees, exchange costs, intermediary bank deductions, and platform service fees incurred in international trade due to the execution of order payment. Common scenarios include cost allocation under settlement methods such as letters of credit (L/C), telegraphic transfer (T/T), and documentary collections. Precautions: Buyers and sellers should clearly specify the party bearing the costs in the contract, e.g., 'all bank charges are for the buyer's account' or 'each party bears its own bank charges'; costs vary significantly across settlement methods, with L/C charges typically higher than T/T; intermediary bank deductions may result in the received amount being less than expected, so it is advisable to agree on charge codes such as 'OUR' or 'SHA'. Unlike 'payment for goods', payment charges do not constitute consideration for the goods but are bank service costs; unlike 'commission', they are not based on a percentage of the transaction amount but are fixed or charged per transaction. Foreign trade practitioners need to calculate these in advance in quotations and contracts to avoid profit erosion.
📝 Examples
1. All order payment charges under this contract, including issuing bank, advising bank, and negotiating bank fees, shall be borne by the buyer. (Note: Clarifies the party bearing bank charges in L/C settlement.)
2. Please confirm whether your company can accept that for T/T payment charges, each party bears its own bank charges, to avoid disputes over intermediary bank deductions. (Note: A common negotiation phrasing for cost sharing in T/T settlement.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner