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Delivery versus payment
Delivery versus Payment
A settlement procedure in which the buyer and the seller of a security agree that the seller will pay the buyer upon the security's delivery to the seller. This agreement is designed to reduce risk to both parties: if the delivery and payment do not occur at the same time there is a risk, however small, of theft by one party or the other. It is more commonly known as cash on delivery.
delivery versus payment (DVP)
A settlement procedure in which a customer instructs that he or she will make immediate payment upon delivery of the purchased security. Also called cash on delivery. Compare receive versus payment.