Documentary Collection

Intermediation of payments and exchange of documents subject to specific conditions

For a seller, Documentary Collection
provides more assurance than clean payment

As a buyer, you can enjoy the peace of mind
that the goods have been shipped

Buyer may keep its funds longer

Lower fees compared to Documentary Letter of Credit

Political, economic, and legal environment in the buyer’s country is stable
Lower-risk transactions with no need for bank’s involvement in the contractual relationship
For more transaction security, use documentary letter of credit

Seller sends necessary documents to the buyer’s bank; the bank only provides documents to the buyer after payment
Conventional documentary payment instrument mainly used in external trade in most countries
It is not secured by a bank’s commitment
Documentary Collection guarantees to the seller that neither the presented documents nor goods (in case of documents of title) would be released to the buyer without payment (bank only releases documents to the buyer against a payment order for the collection settlement) or without acceptance (bank only releases documents against the acceptance of a bill of exchange/issuance of a promissory note by the buyer)

Documentary Collection is particularly beneficial for importers, as there is no need to tie up cash up front.

Importers can enjoy the peace of mind that the goods were shipped
Stronger payment assurance for exporters compared to clean payment
Lower bank fees (compared to charges for Documentary Letter of Credit processing)

Documents:

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