Payment Initiation

Payment Initiation refers to the act by which the buyer, after order confirmation, formally issues a payment instruction to a bank or payment institution to start the fund transfer process. It marks that the payment obligation has entered the execution stage, but it does not mean the funds have been credited. It is commonly seen in settlement methods such as letters of credit, telegraphic transfer (T/T), and documentary collections. Usage scenarios include: the contract stipulates that 'the buyer shall initiate payment within X days after receiving the proforma invoice'; or when the seller chases payment, confirming whether the buyer has already initiated payment. Notes: 1) Initiating payment only indicates that the instruction has been sent; actual crediting is affected by bank processing time, intermediary bank charges, compliance review, etc.; 2) It is different from 'Payment Completion,' which means the funds have been credited; 3) Under a letter of credit, initiating payment may refer to the issuing bank sending a payment notice rather than actual reimbursement. Difference from 'Payment Advice': an advice informs that payment has been made, while initiation is the act of starting it. Foreign trade practitioners should clarify the payment initiation time point in the contract to avoid overdue payment or disputes caused by misunderstanding.