D/D (Demand Draft)

Demand Draft (D/D) is a common remittance method in international trade. It refers to the remitter (usually the importer) purchasing a bank demand draft from a local bank payable to the payee (exporter), and mailing the draft to the payee, who then presents it to the designated paying bank for payment. Its characteristics are the separation of fund flow and document transfer, slower settlement than telegraphic transfer (T/T), but lower costs. It is often used for small transactions, sample fees, commission payments, or between long-term partners with high trust. Precautions include: the draft may be lost or delayed, posing mailing risks; the bank does not notify the payee, so the remitter must send the draft themselves; if the draft is fraudulently claimed, the remitter may suffer losses. Compared with T/T, D/D requires mailing a physical draft, resulting in slower arrival and weaker irrevocability; compared with mail transfer (M/T), D/D uses a draft as proof, offering greater negotiability. In practice, upon receiving the draft, the exporter should present it to the paying bank as soon as possible and note the draft's validity period (usually 6 months) to avoid expiration and return.