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Back-to-back Documentary Credit
Information
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.
