HOW LONG DOES THE SECOND BENEFICIARY USUALLY WAIT TO RECEIVE PAYMENT?

QUESTION

Hi Mr. Old Man,

Thank you for the prompt reply.

Based on your experience, how long does the second beneficiary usually have to wait to get the money after the first beneficiary has been paid?

Thank you.

Genevieve

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ANSWER

Hi,

How long the second beneficiary usually waits to receive payment depends upon whether the transferring bank is the second the beneficiary’s bank and located in the same country as the second beneficiary or the transferring bank is domiciled in a country other than the country of the second beneficiary.

In case the transferring bank is the second beneficiary’s bank and located in the same country as the second beneficiary, the second beneficiary would present the documents directly to the transferring bank which requests the first beneficiary to substitute invoice and drafts and forwards the documents to the issuing bank for payment.

In case the transferring bank is not located in the same country as the second beneficiary, the second beneficiary would present the documents to his bank which will forward the documents to the transferring bank and the transferring bank will request the first beneficiary to substitute invoice and drafts and will forward the documents to the issuing bank for payment.

For the first case, the second beneficiary may receive the payment sooner (like under a non-transferable LC) while for the second case he may receive later.

I have ever come across cases where the second beneficiary had to wait from 15 to 20 days or more to receive the payment.

Best regards,

Mr. Old Man