Lesson 2: Currency, payment method and timing

Payment misunderstandings are among the most common sources of friction in cross-border deals. Most are not about bad faith. They come from details that one side assumed and the other side never heard.

Agree on these points in writing before the first order:

• Currency: U.S. dollars, naira or another currency. Say which, and say who carries the exchange rate risk.

• Payment method: wire transfer, letter of credit, documentary collection, escrow or another method.

• Schedule: deposit, balance and due dates. Write dates with the month in words.

• Bank charges: who pays the sending and receiving bank fees. Unexpected deductions are a common cause of short payments.

• Delivery terms: who pays for shipping, insurance and duties, and when ownership passes. Many exporters use standard trade terms such as Incoterms; ask your trade advisor or counsel which to use.

Understand foreign exchange timing. In Nigeria, access to foreign currency can affect when a buyer is able to pay in dollars, even when the buyer is ready and willing. A delay may reflect bank processes rather than reluctance. Ask about this early, and build realistic timing into your schedule.

Example: explaining payment terms.

Dear Mr. Bello,

Thank you for confirming the order. To make sure we are aligned, here are the payment terms we discussed:

\- Currency: U.S. dollars

\- Method: confirmed letter of credit

\- Schedule: payment on presentation of shipping documents

\- Bank charges: each side pays its own bank's fees

If the foreign exchange process on your side needs more time, please let me know early and we will plan around it together.

Best regards,

Michael Reyes

This message is clear without sounding demanding. It also invites the partner to raise timing issues before they become late payments.