Any difference between DA and DP terms of payment

Posted on 29 March 2023 Category : For Beginners

The information provided here is part of Guide on howtoexport and import

Difference between DA and DP/DAP terms of payment

What is DA and DP in payment terms of exports and imports? How to differentiate between DP and DA?

DA in payment term of international trade means, Documents against Acceptance. DP in payment term of imports and exports means Documents against Payments. How to distinguish between Documents against Acceptance and Documents against Payment in Exports and Imports?

Both DA and DP are the terms of payment related to acceptance of shipping documents pertaining to each consignment from buyer’s bank. Under a DA terms of payment, importer accepts documents on the basis of an assurance to effect payment by accepting necessary bill of exchange. The importer collects shipping documents required to take delivery of imported goods from his bank after such assurance on payment at mutually agreed maturity date of payment.

In a DP payment terms, the imported need to effect payment against respective import consignment, before collecting documents for delivery of imported goods. Under a payment terms – Documents against Payments, the bank delivers documents required for import clearance only after receiving the value of goods from the importer. The buyer takes delivery of goods with the original transport document of title delivered by his bank after effecting payment under sale of goods mentioned in the document. The buyer’s bank in turn, sends the said amount to seller’s bank as per banking procedures and formalities under international trade. Also read Also read Advance payment the best way of terms for business Letter of credit - How does LC work? Is DP terms of payment safe in export business? Documents against Acceptance. - How reliable the terms of payment in exports

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Comments

PUSHKAR SINGH POKHARIA: On 19 January 2014 Thanks for the clarifications.

alnsastry: On 12 March 2014 can you pl let us know to write bill of exchange for D/A TERMS

rohit: On 12 February 2015 what is more safe dp or l/c ?

Admin: On 12 February 2015 Hi Rohit, According to me, LC is more safer than DP

Sahil: On 17 February 2015 can u please explain me Letter of credit?

Admin: On 17 February 2015 Hello Sahil, Please read another posts about LETTER OF CREDIT in this website.

sgmit solutions : On 19 February 2015 i want to import the product (fiber optic media conveter) from china i applied for IEC in Andhra pradesh.how to give LC and DA,DP ?

Subramaniam: On 06 April 2015 Dear Sirs We have made an export under D/A 90 days and we got the Bank acceptance for the payments " saying amount accepted with Maturity date" Now the buyer is saying that he can not make payments on maturity asking more credit days further. As already we lose money in this shipment and can not offered to grant further more credit. Please advise if he can not pay on maturity will the buyers bank transfer the bills amount automatically? as they have already send acceptance to my Bank by swift; or are there any chance that buyer can stop the payments?? Please advise. Regards. Subramaniam

Ashraf Majeed - GMAIL : On 18 April 2016 Can please assist and advise what can be done if Importer bank does not pay on maturity date against goods shipped on DA basis. The payment maturity date has been confirmed by Importer bank under tested message to our bank, yet they have not paid on maturity.

: Shajan Mavely : On 20 April 2016 D/A export bill forwarding dirct to buyer -reg.

Shajan Mavely : On 20 April 2016 One of my buyer based in Liberia, W.Africa has asked me to send original export docs dirctly to them ((not thru bank). Terms is D/A 55 days from B/L date, amt USD 18000/. Am I permitted under RBI rules, to forward docs dirctly to buyer on D/A terms. If any amt ceiling, kindly let me know d dtls.

pravin rana: On 29 August 2016 Sir, We are exporting Banana. Can v open foreign LC on the consignment base. Shall v get money from importer on realization value? Means, for example export value is USD 100 and importer pay USD 110 (on actual realization value)

Ajinkya Sathe : On 08 April 2017 Dear Sir, One of my friends due to sanctions on IRAN transferred $22,750.00/- to one of the exporters account in Nagercoil (Tamilnadu) from Hong Kong for importing Banana's to IRAN. Later since he didn't have much of operations in Hong Kong he closed his office & Ban account in Hong Kong. Money was transferred in May 2015 till date the exporter has not exported banana saying the quality is not good. When asked to pay back to importer he came saying his Bank will not return the money money to the different account of Importer to another country, money will be transferred to the same account which mad the advance payment. This exporter is always delaying the shipment by postponing the the date of shipment. As far as I know money can be returned back to the importer by getting a request letter to transfer money to the different account of the importer. Today when i visited the exporters bank the manager he argued and said that he will follow the instructions of exporter and as per exporters wish bank will transfer the money to any beneficiary. Also the exporter has given one more commitment to ship the bananas till the end of January. I request you to kindly guide me so that i can get either my friend's money back or get the shipment done legally. Waiting for your generous response. I have attached the copy of the request letter given by the exporter to his bank.

Md Samim Nawaz: On 22 May 2017 Hi Sir I want to export fresh Onion in Dubai in D/P payment terms. After doing the shipment I will send all legal documents to Buyer's Bank through my Bank.My question is that if the Importer does not accept/ withdraw the delivered documents from his bank against said amount mentioned in D/P what will happen then or the importer's Bank will release amount against the valid legal documents presented to them without importer's non-acceptance of documents. Please guide me

mahendra dev: On 01 June 2017 please advise 60 days bill discounting procedure for shipment made under ecgc cover with their terms of da 60 days . how exporter can discount the invoice while submitting shipping documents to his bank . best regards

Diksha Sharma : On 13 August 2017 Dear All, I would Like to know the Process of Banking in DA. May Anyone Guide me.How to send Docs.Shall we send by bank or Direct. Thank You

Cherif: On 11 May 2019 I am MBA student of MIM program I am interested in such subject as a future business manager

lipsy garg: On 14 May 2019 Can anyone explain "Usance D/P bill". On the eximguru site, it says "A Usance D/P Bill is an agreement where the buyer accepts the bill payable at a specified date in future but does not receive the documents until he has actually paid for them. The reason is that airmailed documents may arrive much earlier than the goods shipped by sea." So, is it a D/P or D/A because it states that it is payable at a specified future date. Please clear the doubt. Thanks.

DANIEL TEDLA: On 08 April 2020 Can you please explain about supply credit?