Agree who commits first
Buyers may be asked to pay first. Sellers may be asked to deliver first. The payment method defines those commitments.
UAE businesses should compare funding timing, required evidence and payment conditions before accepting a contract.
PaySec and the agreed delivery process
With PaySec, the buyer and seller accept a digital contract. The customer payment is secured in a bank. The seller completes the work, and the buyer confirms through PaySec. PaySec sends the release instruction, and the bank pays the seller under the agreed terms.
This connects supplier payments to the work both sides accepted. The bank holds the funds while the seller completes the work. Buyer confirmation through PaySec leads to the bank release instruction.
Letters of credit
A commercial letter of credit links a bank's payment commitment to documents meeting its stated conditions. The document requirements matter, including what must be presented and when. That differs from a buyer reviewing a PaySec delivery stage.
A contract requiring a letter of credit needs to be assessed against that instrument's terms.
Bank guarantees
A bank guarantee addresses a specified obligation under its terms. A demand guarantee can require payment when a demand meets its documentary conditions. Its purpose differs from reviewing ordinary delivery stages and releasing the related payment.
PaySec records the agreement and delivery process. It does not issue a bank guarantee.
Post-dated cheques
A post-dated cheque names a future payment date. The date alone does not show that a particular delivery was accepted. It also does not establish that the money for your deal has been separately secured.
PaySec connects payment secured in a bank with agreed delivery evidence and buyer confirmation.
Advance payment
With advance payment, the buyer pays the seller before delivery. The seller receives money earlier, while the buyer still needs the promised goods or work. The buyer should understand the delivery obligations before making that commitment.
With PaySec, the customer payment is secured in a bank. The buyer confirms completion through PaySec. PaySec sends the release instruction, and the bank pays the seller under the agreed terms.
Credit terms
With credit terms, the seller delivers before payment becomes due. The buyer has time to pay, while the seller must plan for the period before receiving money. A due date and a completed payment remain different events.
PaySec connects bank-secured payment to the delivery terms accepted for the deal. It does not turn a funded transaction into supplier credit. A buyer needing time to raise the purchase amount must address that need separately.
Example of a Dubai supplier order
A Dubai company orders shelving for AED 50,000. The supplier requests payment before dispatch. The buyer wants to inspect the shelving after delivery and installation.
Under a full advance, the supplier receives the amount before that inspection. Under agreed credit terms, the supplier delivers and waits for payment. A post-dated cheque adds a date but does not define the installation evidence.
Using PaySec, the parties can describe delivery and installation as separate stages in their digital contract. The customer payment is secured in a bank. Proof, buyer confirmation and payment follow the agreed terms.
Questions about choosing a method
Is PaySec suitable for every contract?
Suitability depends on the work and the payment conditions. Consider any specific bank instrument required by your contract before choosing how to proceed.
Does PaySec replace a required letter of credit?
A letter of credit has its own document and payment conditions. A contract requiring that instrument needs to be assessed on those terms.
Does PaySec provide money for a buyer to fund a purchase?
The buyer funds the agreed payment from their existing bank account. The payment is secured in a bank. This process should not be treated as a promise of purchase finance.
Does PaySec remove the need to review the counterparty?
Both parties should understand who they are dealing with and what they are accepting. A documented delivery and payment process does not replace that commercial judgement.
The overview explains how PaySec works. The account explanation covers funds held by a bank and payment to the supplier.