Export collection is a frequently used payment method in international trade. If you choose to send shipments by sea and the payment term is CAD (cash against documents), export collection can be a way to secure your payment after shipment of the goods or at least to remain in control of your goods.
After an agreement is made with the buyer to use collection, you ship the goods and send the documentation (invoice and transport documents etc), to Nordea, which will forward the documents to the buyer's bank. The buyer will get access to the documents after paying the invoice or accepting to pay on a future date.
The bank monitors the collection instructions and will credit your account when the funds have been received from the buyer’s bank.
You can process your collections and follow their status via Trade Finance Global.
- You retain control of the goods until they are paid for or a future payment date is accepted.
- Higher security than an open account and possibility of earlier payment.
- The seller has the right of possession to the goods until the documents have been redeemed.
- Lower costs than an export Letter of Credit.
- International rules. The ICC Uniform Rules for Collection URC 522 regulate the terms and conditions related to the documents and to the time and method of payment.