What international method of payment is issued by a bank and guarantees payment to a seller provided that the seller has complied with the applicable terms and conditions of the particular transaction?

Question

Quizplus · Accepted Answer

A letter of credit is a method of payment where a bank guarantees payment to a seller, provided that the seller has complied with the applicable terms and conditions of the particular transaction. It serves as a sort of insurance policy for the seller, who can be sure that they will receive payment if they fulfill their end of the bargain. This is particularly useful for international transactions where trust and communication may be more difficult.

What International Method of Payment Is Issued by a Bank