Advance payment / Cash Before Delivery / CBD

Advance payment is the safest, but rather rare solution among the payment methods that can be recorded in the sales contract. However, its importance is increasing with the spread of online commerce.

One of the most important conditions of the sales contract for the seller is when, how and with how much security he can get the consideration for his sold product. 

In addition to the various international customs, there are many solutions that offer a wide range of options according to the level of risks of the seller and the buyer. (For example, letter of credit or that documentary collection.)

The Cash on Delivery the most untrustworthy seller usually insists on payment in advance. (Such solutions include CBD - Cash before Delivery, DVP - Delivery versus Payment, DAP - delivery against payment, advance payment.) He does not know his customer, he may doubt his contractual promise of payment, so he insists, seeking great security, that the customer pays the consideration even before the delivery of the goods. 

This solution is relatively rarely used in legal and offline international trade, but it can be a solution in the trade of scarce goods. It can also happen if the buyer wants to buy at the lowest possible purchase price, since the security and time of payment is one of the most important factors influencing the price. You can pay in advance in addition to the above importer also, who is afraid that transfers abroad will be blocked in his country and wants to receive the goods in any case. 

However, in the world trade of most goods, buyers can usually choose between sellers, so they do not, or only rarely, enter into a contract with a seller who asks for payment in advance.

The spread of online trade changed this to some extent: it emphasized prepayment, which is already prevalent in on-site retail, the cash with order in the form of (Cash with Order - CWO). 

Online merchants, web shops a significant part of them requests the value of their goods at the same time as the order (payment by bank transfer, credit card, PayPal, etc.), it can be the physical goods or any copyright digital content protected by. The goods will only be handed over to the customer, and the content can only be downloaded after the payment has been made online.