What is the meaning of DP Payment term?

DP, or "Documents against Payment," is a payment term commonly used in international trade. Under this arrangement, the seller ships the goods and provides shipping documents to a bank, which then releases the documents to the buyer only upon payment. This method provides a level of security for the seller, ensuring that they receive payment before the buyer can take possession of the goods. DP is often preferred when trust between the trading parties is still being established.