Real-world processes

The intermediaries that facilitate payment are the respective banks of the exporter and the importer. In this case, the trade arrangement is fulfilled by the trusted relationships between a bank and its client, and between the two banks. Such banks typically have international connections and reputations to maintain. Therefore, a commitment (or promise) by the importer's bank to make a payment to the exporter's bank is sufficient to trigger the process. The goods are dispatched by the exporter through a reputed international carrier after obtaining regulatory clearances from the exporting country's government.

Proof of delivery to the carrier is sufficient to clear payment from the importer's bank to the exporter's bank, and such clearance is not contingent on the goods reaching their intended destination (it is assumed that the goods are insured against loss or damage in transit.) The promise made by the importer's bank to pay the exporter's bank specifies a list of documents that are required as proof of dispatch, and the precise method of payment to be made immediately or over a period. Various regulatory requirements must be fulfilled by the exporter before getting documentary clearances that allow them to hand off the goods to the carrier.