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Back-to-back Documentary Credit
Why is this payment method right for you?
- A capital efficient payment method
- Allows you to use an existing Documentary Credit as collateral
- Helps to protect your control over relationships with trading partners
Other benefits
- A safe and convenient way to settle trade transactions
- A more flexible payment option than Transferable Documentary Credits
- Keeps buyer and supplier details confidential so you can maintain your commission income
- Reduces payment risk by dovetailing sourcing and sales transactions to avoid discrepancies
How does a Back-to-back Documentary Credit work?
Back-to-back Documentary Credits (DCs) are used by traders, middlemen and buying agents. A Master Documentary Credit is issued by your buyer and is payable to you. Based on this master, you issue another DC, known as a back-to-back DC, to purchase goods from your supplier.
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