International Payments

In what types of situations is a documents against payment collection typically used?

The documents against payment collection transaction is a somewhat desirable payment method for a company that is selling product internationally in that it enables the seller to retain control over the shipped product until the buyer pays by honoring the sight draft that accompanies the title documents. The seller who uses this payment method should be comfortable not only with the buyer's credit worthiness, but also with the credit reliability of the country in which the buyer is located. The seller should also be confident that the buyer does in fact desire to obtain the product shipped by the seller, as there is virtually nothing that a U.S. seller can do in a documents against payment collection transaction to force the buyer to pay on time or to force the buyer to pay at all, absent a strong desire by the buyer to take possession of the product shipped.

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