At this point of the book, you should be familiar with the concept of the letter of credit. However, let's quickly recap the concept behind it, illustrated in the following diagram:
The letter of credit is a payment vehicle whereby, on request from a buyer, a bank will issue a letter of credit to a seller, stating that provided that the terms and conditions are met, payment will be issued. While this process is very much ingrained in international trade, the use of letters of credit is a very old process that has its root in the First Crusade, where the Knights Templar needed to find a way to allow pilgrims to travel ...
