CHAPTER 15
Sample Bank Fees credits and documentary collections vary from country to country and from market to market within a country. Fees also vary depending upon the relationship a company has with its bank.
BANK FEES FOR DOCUMENTARY
E X A M P L E : Bank fees in Hong Kong are low because of the widespread use of such
payment methods there. On the other hand, they are quite high in Europe where such payment methods are not in as much favor. Prices in the United States are about in the middle.
Within large and geographically diverse markets like the United States, however, there is a great variance in bank fees. These are dependent on local market considerations. For example, in some markets documentary credits are considered to be “commodity services” meaning that customers generally know what they are buying, consider it to be virtually the same from every source, and buy based on price rather than service. Finally, larger commercial banking customers who use documentary credits and collections on a regular basis will pay less than small firms who only use them infrequently. In our survey of bank fees, several bankers reported that processing a single documentary credit for a first-time customer results in a loss to the bank; so much time is spent educating a customer who may be using a documentary credit for the first and last time. Bank fees for documentary credits and documentary collections are not charged on a package basis, but rather on an individual, or “à la carte,” basis. Everything you order adds to the bill. The fees listed on the following pages will give you a range of typical charges. The examples will give you a more concrete idea of what individual transactions cost. DISCLAIMER
It is always awkward to list sample fees in a book with international distribution. Fees vary wildly from market to market and change from time to time within given markets. The structure of a bank’s rates may vary as well. Although bankers and traders from several countries were interviewed, your company situation, banking market, and local government regulation may produce rates different from those listed below.
109
