Finance & paymentsen
Documents against Payment (D/P)
A documentary collection method where shipping documents are released to the buyer only against immediate cash payment.
D/P (Documents against Payment) is the most secure form of documentary collection for the seller. The presenting bank releases the documents (bill of lading, invoice, certificates) to the buyer only upon receipt of full payment.
The mechanism relies on control of transport documents: until the buyer has paid, they do not have the bill of lading needed to collect the goods at port. This control constitutes the seller's indirect security.
Limitations to be aware of:
- Air or road transport: the consignee may collect goods without a bill of lading, reducing protection
- Buyer refusal: if the buyer does not collect, goods remain stranded
- No bank undertaking: the bank does not guarantee payment
D/P is recommended for maritime transactions with reliable partners. For non-maritime transport, a letter of credit remains preferable.