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.

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© 2004 John Michael Pierobon

Notes