Import Documentary Collections

Documentary Import Collections are payment mechanisms, usually cheaper than Letters of Credit but provide more security to the supplier than open account transactions. This mode of payment generally boost trading relationships by reassuring suppliers of their payment and safeguards the importer’s title to goods, usually funds are received from the importer and remitted to the exporter through the banks involved in the collection in exchange for those documents.

Documentary collection involve the use of a draft that requires the importer to pay the face amount either on sight (document against payment—D/P) or on a specified date in the future (document against acceptance—D/A).