Documentary collection

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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

Other link

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