Under a documentary collection the seller of goods instructs his bank to forward the relative shipping documents to the bank of the buyer with the instructions that the documents only may be released to the buyer against immediate payment ("payment at sight").
It gives the seller a certain surety that the documents needed for goods import are only in possession of buyer after payment has been effected.
In case of payment on a later date, documents will be released against acceptance of a Bill of Exchange by the buyer. After this acceptance the documents will be delivered to buyer and he can get access to the goods. However, since there is no liability for the banks, there must be a trust between buyer and seller that documents will be accepted and paid.
MUFG Bank (Europe) N.V. provides also the service to collect cheques on behalf of their client.
Cheques will be sent to the correspondent bank. Settlement will take place after the receipt of funds.