Business always requires financial transactions, and these transactions can be a bit trickier when they cross national boundaries. When money goes international, new considerations need to be taken into account. For example, exchange rates, transaction limits and fees all become important. Most of all, particularly when dealing in international trade, extra steps often need to be taken to make sure both parties honor their agreements.
To aid in this process, different financial instruments are available. For international trade, the most important is the international letter of credit. These letters of credit give assurances to both the buyer and the seller that payments will be made, and products supplied, as agreed upon. By doing so, they made international trade transitions considerably easier and therefore increase the volume of trade.
A less sophisticated but more common method of payment is the international money transfer. Understanding exactly how these, and other international financial transactions work, will aid anyone doing business across national boundaries.