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Document against payment system: Definition, advantage & steps


Are you affiliated with the business? If you involved in import and export business, then this article is appropriate for you. Here you will, get a solid information of document against payment. Do you want to learn more about it? Then keep scroll down this page.


Document against payment
Document against payment is an international trade procedure. Here the exporter sends the sight draft to his bank and importer clears all payment through his/her clearing bank. It is an easy transaction process. People, who involved in export and import business, use this payment process.
Now read the below points and know the advantage of using this payment process.

Advantage of document against payment
  • It is an updated payment method. Those who are involved in a large-scale business, they can buy goods in this payment method.
  • Document against payment less pricey than letter of credit.
  • The document against payment is a system under which a seller instructs the presenting bank to control over shipping and title documents to the importer only if the importer fully presents the following bill of exchange or draft. And, the seller sends the sight draft to the clearing bank, along with documents needed for the buyer to get the supplies from customs and the importer has to settle payment with the bank before it releases the documents. He/ she can take delivery of the properties if the importer fails or refuse the payment and that time, the seller may recover all the properties and they can resell them.
  • This process is less complicated.
  • It is not difficult than its alternatives, such as letters of credit.
A common formula
Step1. Exporter sends goods to the importer
Step2. Exporter send document to his/her bank
Step3. Exporter bank sends that document to importer bank
Step4. Importer bank sends that document to the importer
Step5. Importer makes payment through importer bank
Step6. Importer bank sends payment draft to the exporter bank
Step7 Exporter bank sends that payment to the Exporter.
Hope, you understand the above steps. Now, read the concluding passage to find a trade corporation company.
Here you can contact for this transaction
You can contact ‘RNR Trade Corporation Company Limited’ for commercial letter making and document against payment paperwork. They handle various financial and broking services. They represent various areas of business. However, if you want to learn more about documentary collections, visit this site - rnrtradecorp.com. If you visit this site, you will get brief information about it.
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Location: Thailand

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