A Study on the Current Situation and Problems of Payment Methods in the International Trade between Korea and China

Abstract

Purpose This study provides practically useful guidelines for Korean companies by analyzing the status of the payment methods of Korea and China, which is increasingly important in accordance with the recent increase in trade volume, discovering problems, and suggesting solutions. Design/Methodology/Approach This study included a comprehensive review of prior domestic and foreign literature as well as e-mail consultations with experts in the payment field around the world. Findings Findings revealed that as for the payment methods of Korea’s exports in 2021, the remittance method accounted for 70.3%, letter of credit method was 7.6%, collection method was 8.3%, and other methods were 13.8%. The remittance method accounts for 70% of the total export value, followed by the collection method and L/C method. Since there are no official statistics on payment methods in China, it is impossible to grasp the status of China’s recent payment methods. Research implications This paper presented the status and problems of payment methods of Korea and China. Korea needs to revise the statistics of payment methods, and China needs to perform official statistical work on payment methods.