New trading partnerships elevate payment risk

LOCAL importers and exporters are dealing with a range of new customers and suppliers as a consequence of SA’s shifting trading patterns – and for exporters this raises the issue of payment risk to a higher level within their businesses. “In the past, exporters were dealing with longterm, well-established relationships and there was a high level of knowledge and trust that had been built up over the years,” says FNB International Banking's Steven Matthews. “Now they are often trading with new customers with whom no track record has been established. “In addition, they are doing business with new countries and do not know the financial position of that country and any particular conditions that may exist and complicate the trading relationship. For example, the exporter’s customer may be able to pay, but the country in which they operate may not be able to meet financial obligations.” A pitfall that can be overlooked by new entrants into the import and export markets is costing risk. Costing a product is a very complex process and all the different tariffs and tax structures, shipping costs, and other costs must be taken into account. Matthews says that expertise is available within FNB International Banking to provide advice on every element of the process, “not only in terms of typical banking things like the currency and payment issues. “Businesses should not lose out on opportunities offered through the export/ import channel because of the fear of processes.”