Spherical Fuzzy WASPAS-based Entropy Objective Weighting for International Payment Method Selection

Abstract

In international trade, exporters prefer to receive payments as quickly as possible, and importers want to make payments as late as possible. In this respect, the payment field, an essential condition for trade transactions, also represents the positions of exporters and importers conflict. In addition, there are many cases in which various variables must be considered rather than only one specific variable representatively affecting payment, particularly in the case of import-export Small and Medium-Sized Enterprises (SMEs) from emerging countries. A selection of proper payment methods can be categorized as a Multi-Criteria Decision-Making (MCDM) issue. Therefore, this study aims to propose a novel and efficient Spherical Fuzzy Weighted Aggregated Sum Product Assessment based Entropy Objective Weighting method (SF-EW and WASPAS-SF) to evaluate international payment methods with uncertain information. First, SF-EW model is applied to determine the relative weights of critical factors. Second, international payment method alternatives are prioritized by the WASPAS-SF approach. Five essential factors for four international payment methods are proposed based on experts’ opinions and the existing literature. A real-world case study from Vietnamese import-export SMEs is presented to validate the applicability of the proposed framework. The results indicated that “Characteristics of payment method (PA)” had the most significant impact on international payment method selection. In comparison, “Letters of Credit (L/C)” was the most reliable payment method with the highest ranking available to international traders. Furthermore, a sensitivity analysis was performed to examine the validity and robustness of the proposed decision support model. Consequently, this study could contribute to international payment services and in the context of globalization and international trade.