D-1-4- Documentary remittance or collection a payment technique


Payment processing is one of the main preoccupations of companies with international transactions. Doing business is important, but compensation is essential. Esandis offers you free training space dedicated to international transactions, and all the skills you need to become an export or import manager. Our objective is to provide you an understanding of the importance of the payment component of an international transaction. A documentary remittance or collection is therefore a payment solution.

1-5-1- Documentary remittance or collection: definition

Documentary remittance is a payment technique that involves exporter and importer banks to reach the objective of smooth international trade operations.

The documentary remittance is somewhat unique in the sense that the exporter and the importer use their respective banking institutions as intermediaries to collect payment in exchange for a transfer of documents. (payment against documents). As intermediaries, the banks become, in essence, the guarantors of well-executed transactions.

Like all payment techniques, documentary remittance has its advantages and drawbacks.

1-5-2- Conduct of a documentary remittance

The documentary remittance process is quite long and at certain points can resemble a documentary credit.




1-5-3- The documentary remittances or collections

Documentary remittance can be distinguished as either import documentary remittance, or export documentary remittance.

Documentary remittance can also be distinguished as against payment or against acceptance.

1-5-4- Additional information: The role of each party, the stakeholders and the costs

During the documentary remittance process, neither the importer nor the exporter bank assumes commitment or responsibility, in contrast to the documentary credit.

There are four stakeholders during documentary remittance.

The cost of documentary remittance relates to the services requested from the exporter and/or importer bank.

1-6-5- Legislation

Documentary remittance is subject to the uniform rules for receipt published by the ICC, International Chamber of commerce (Publication no. 522), but cannot replace or contradict laws or ordinances within the respective exporter and/or importer countries.