Documentary Collection Against Payment
- Documentary collection against payment is the closest international equivalent to cash on delivery.
- It is not as expensive as a letter of credit.
- The seller must ship before getting paid.
- The buyer does not receive the goods until payment is made.
- The buyer receives the goods after signing a note promising to pay.
- This promisory note may be negotiable.
- There is risk with this form of payment.
- The buyer may not contact the collecting bank to acknowledge acceptance.
- The collecting bank is under no obligation to force such an acknowledgement.
© 2004 John Michael Pierobon