When companies export and import goods internationally, paying and transferring ownership can be risky if the parties don't know or trust each other. Documentary collection provides a secure payment process that helps facilitate trade in these situations. The exporter ships the goods and then presents documents transferring legal ownership to the importer's bank. The bank only hands over these ownership papers to the importer after they make payment as agreed. This way, the exporter knows they will get paid before releasing the goods, while the importer sees proof of shipment and verifies everything before paying out. Having this reliable process governed by standard rules allows companies to trade globally, even with strangers, as both sides feel their interests are protected.
Read More: https://www.axioscreditbank.com/blogs/documentary-collection-in-global-trade
