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7 Apr 2001

Dear Dr. Ecommerce

What are the suitable types of electronic payments for a Large business that sells Mining equipment to other big companies? What are the advantages and disadvantages of this type of payment? How should we address the security concerns related to online payments, if there is any?

Mike

Dear Mike:

When companies sell big, expensive things to each other, they obviously don't whipout their credit cards to pay. Moreover, terms of payment can often be complex and are usually written into contracts. For example, the total payment may be broken down into several payments to be made at various times and based on certain milestones. Moreover, partial payments may be tied to specific clauses in contracts.

Generally, payment is made in one of two ways:

1. Bank transfers, that is the buyer's bank transfers payment to the seller's bank. If the buyer and seller are in two different countries, SWIFT is generally used for the transfers. These transfers are generally very secure. Moreover, issues of security are generally the banks' problem, not the buyer's or seller's.

2. Cheques. In the USA, many developing countries and other places, people still pull out their cheque books and write cheques to pay for things. Of course a cheque basically facilitates a bank transfer as well. It's simply slower.

For more information on electronic payments, take a look at the links on this page.

Good luck,

Dr. Ecommerce