Documentary payments

Documentary payments like Letters of Credit and Documentary Collections are secure methods of settling international trade transactions reducing risks and ensuring compliance between trade parties

At SEB, we support our clients in international trade with solutions like Letters of Credit and Documentary Collections. These products are not only designed to reduce the risks related to international trade, securing payment and correct delivery at the right time but also facilitating financing.

Letters of Credit

Letters of Credit are well-suited for export companies trading with politically unstable or economically weak countries or just with new unknown counterparty. The Letters of Credit secure the payment when the exporter presents compliant documents outlined in the Letter of Credit.  When exporter is not comfortable with the importer’s bank or country risk they can agree with their importer that Letter of Credit is issued with a confirmation request. 

As importer, Letters of Credit help you reduce risks of incorrect deliveries and prove your creditworthiness. The Letters of Credit also facilitate different financing solutions. 

SEB helps you with the right Letter of Credit structure both for exports and imports. 

A Documentary Collection

A Documentary Collection is a payment method where the exporter uses the integrity of banking sector to collect payments from the importer in exchange for shipping documents. Banks involved don’t have any undertakings to pay like in Letters of Credit, hence there is no credit limit required on the importer. However, if a deferred payment terms have been agreed between the trade parties the exporter might insist a payment guarantee against releasing the shipping documents.