settlement drafts

A settlement draft is a payment instrument used in financial transactions where the payer instructs their bank to transfer funds directly to the recipient’s account. It functions similarly to a check but is often used in international trade or large transactions, ensuring timely settlement between parties. The draft specifies the amount to be paid and the recipient’s details and is typically paid upon presentation or at a future date. It helps facilitate secure, traceable, and efficient transfers without needing to send physical cash.