Compare · Side by side
D/P vs D/A
Compare the two common documentary-collection release conditions.
| Question | D/P | D/A |
|---|---|---|
| Release condition | Documents released against payment. | Documents released against acceptance of future payment obligation. |
| Seller cash | Earlier if buyer takes up documents. | Later at maturity. |
| Buyer credit risk | Reduced compared with D/A, but refusal/market risk remains. | Higher because documents can be released before final cash payment. |
| Possible financing | Collection proceeds/facilities as available. | Accepted draft/receivable may potentially be financed. |
| Bank guarantee? | No automatic bank guarantee. | No automatic bank guarantee unless separately added. |
How to use this comparison
The labels are a starting point, not a substitute for the actual wording. Before choosing a structure, ask what creates the payment obligation, who carries the credit risk, what rules apply, what event triggers payment and whether the receiving bank or financier accepts the structure.
1. Obligation
Who actually promises or is ordered to pay?
Who actually promises or is ordered to pay?
2. Trigger
What must happen before payment is due?
What must happen before payment is due?
3. Rules & documents
What wording or documentary conditions control the result?
What wording or documentary conditions control the result?
4. Bank acceptance
Will the relevant bank accept, advise, confirm, finance or process it?
Will the relevant bank accept, advise, confirm, finance or process it?