Documentary collection

(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
• Twenty-Foot Equivalent Unit

Other link

Trade finance around the world, Centre for Economic and Policy Research, 2016