A form of settlement, which is applied in the international trade. Documentary Collection of Payments is mainly applied, when an exporter and importer trust each other and the economic and political situation is stable in the country the a buyer. Terms and conditions of the Documentary Collection of Payments might stipulate the documents against payment and the documents against acceptance.
Bank is not obliged to check the documents and it is not involved with the main transaction.
Documentary Collection of Payments is applied for both parties – exporter (vendor) and importer (buyer).