Letter of credit
credential supervisor is an instrument that provides a secure payment method to clients in the business and strikes a balance between the opposing interests of the buyer and seller. While the buyer does not want to pay the purchase price before he / she receives the goods into possession and then becomes convinced of the compliance of the goods with the terms of the contract, the seller does not want to send the goods until he has received the assurance that the purchase price will be paid to him.
Letter of credit allows the buyer to protect the interest of the buyer that the supervisor involved in the letter of credit will pay the seller the agreed purchase price, but only when the seller submits to the supervisor all documents prescribed in the letter of credit, proving that the contractually agreed quantity and quality of the goods or service delivered to the customer. Letter of credit to the seller is assured that the purchase price will be paid to him upon submission of the said documents.