Bolivia - Methods of Payment Bolivia - Methods of Payment
There are several ways that Bolivians can pay international sellers; letters of credit are the most common. Here are all of the methods of payment authorized by the Bolivian banking system:
- An open account transaction gives security to the buyer and represents the greatest risk for sellers. The exporter ships the goods as soon as the order is received and then invoices the purchaser for payment within 30, 60, or 90 days.
- Using documentary collection, a bank in the importer's country acts on behalf of an exporter for collecting and remitting payment for a shipment. The exporter presents the shipping and collection documents to his or her bank (in own country) which sends them to its correspondent bank in the importer's country. The foreign bank (called the presenting bank) hands over shipping and title documents (required for taking delivery of the shipment) to the importer in exchange for cash payment (in case of "documents against payment" instructions) or a firm commitment to pay on a fixed date (in case of "documents against acceptance" instructions).
- Letters of credit are written commitments to pay from a buyer's or importer's bank (called the issuing bank) to the seller's or exporter's bank (called the accepting bank, negotiating bank, or paying bank). A letter of credit guarantees payment of a specified sum in a specified currency, provided the seller meets precisely defined conditions and submits the prescribed documents within a fixed timeframe. These documents usually include a clean bill of lading or air waybill, commercial invoice, and certificate of origin. To establish a letter of credit in favor of the seller or exporter (called the beneficiary) the buyer (called the applicant or account party) either pays the specified sum (plus service charges) up front to the issuing bank, or negotiates credit. Letters of credit are formal trade instruments, and are usually used where the seller is unwilling to extend credit to the buyer. The guarantee of payment thus gives the exporter confidence that the importer is able to pay for the goods while assuring the importer that payment will be made only after the terms outlined in the letter have been met.
- Bolivians can make purchases abroad using Bolivian credit cards or PayPal. Foreign card holders can make credit card purchases within Bolivia depending on the regulations of their home bank. Bolivian companies cannot charge foreign buyers using PayPal or other Internet transfer methods.
There are no credit rating agencies to rate individual credit in Bolivia. The Financial Services Supervisory Authority (Autoridad de Supervisión del Sistema Financiera, or ASFI) is responsible for monitoring credit ratings.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.