Documentary collection: Difference between revisions
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imported>Doug Williamson (Amend link.) |
imported>Doug Williamson (Summarise 2011 data from CEPR report: http://voxeu.org/article/trade-finance-around-world) |
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Compared with letters of credit (LCs), documentary collections are used for smaller transactions, and a smaller total value of transactions. | 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% | |||
Revision as of 09:07, 13 June 2016
(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 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
- Documentary credit
- Documents against acceptance
- Documents against payment
- Draft
- Letter of credit
- Remitting bank
Other link
Trade finance around the world, Centre for Economic and Policy Research, 2016
