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International Trade vocabulary · Payment Methods and Letters of Credit

Documentary collection

Meaning in international trade, with examples

nounCommon term

In international trade, documentary collection means: A payment method in which the exporter's bank sends the shipping documents to the buyer's bank, which releases them only when the buyer pays or accepts a bill of exchange.

In Turkish: vesaik mukabili tahsil, belgeli tahsil

How it is used

Cheaper and simpler than a letter of credit, but the banks do not guarantee payment. There are two main forms: D/P (documents against payment) and D/A (documents against acceptance). Most collections follow the ICC rules URC 522.

Example sentences

  1. We usually work with this customer on documentary collection through their bank in Tunis.

  2. Under documentary collection, the buyer could still refuse the documents.

Common collocations

  • documentary collection D/P
  • send documents for collection
  • collecting bank
  • documentary collection terms
  • cash against documentsA payment term in which the buyer pays the bank first and only then receives the original documents needed to collect the goods.
  • letter of creditA bank's written promise to pay the seller a set amount, provided the seller presents documents that meet the exact conditions of the credit within the stated time.
  • open accountA payment method in which the seller ships the goods and sends the documents directly to the buyer, who pays later on an agreed date.
  • payment termsThe agreed conditions for paying for goods: how much is paid, when, by what method and through which bank or document.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Payment Methods and Letters of Credit

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