Documentary collection: Difference between revisions
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An international payment method that processes the collection of a draft and accompanying shipping documents through international correspondent banks. | An international payment method that processes the collection of a draft and accompanying shipping documents through international correspondent banks. | ||
A documentary collection is a structure under which a bank collects payment from a buyer | A documentary collection is a structure under which a bank collects payment directly from a buyer (by presenting documents to the buyer). | ||
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DC and LC indicative data is summarised below. | DC and LC indicative data is summarised below. | ||
=====Average transaction sizes (US exports)===== | =====Average transaction sizes (US exports)===== | ||
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LCs: US$ 0.5 - 1 million | LCs: US$ 0.5 - 1 million | ||
=====Proportion of world trade in goods===== | =====Proportion of world trade in goods===== | ||
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* [[Commercial risk]] | * [[Commercial risk]] | ||
* [[Correspondent banking]] | * [[Correspondent banking]] | ||
* [[Cost and freight]] | |||
* [[Documentary credit]] | * [[Documentary credit]] | ||
* [[Documents against acceptance]] | * [[Documents against acceptance]] | ||
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* [[Letter of credit]] | * [[Letter of credit]] | ||
* [[Remitting bank]] | * [[Remitting bank]] | ||
* [[Twenty-Foot Equivalent Unit]] | |||
Latest revision as of 09:24, 11 March 2021
(DC).
An international payment method that processes the collection of a draft and accompanying shipping documents through international correspondent banks.
A documentary collection is a structure under which a bank collects payment directly from a buyer (by presenting documents to the buyer).
Compared with letters of credit (LCs), documentary collections (DCs) are used for smaller transactions, and a smaller total value of transactions.
DC and LC indicative data is summarised below.
Average transaction sizes (US exports)
DCs: US$ 0.1 - 0.2 million
LCs: US$ 0.5 - 1 million
Proportion of world trade in goods
DCs: 1 - 2%
LCs: 10 - 15%
See also
- Cash against documents
- Collecting bank
- Commercial risk
- Correspondent banking
- Cost and freight
- Documentary credit
- Documents against acceptance
- Documents against payment
- Draft
- Letter of credit
- Remitting bank
- Twenty-Foot Equivalent Unit
Other link
Trade finance around the world, Centre for Economic and Policy Research, 2016
