Delivery versus payment is a way of settling transactions when securities, such as bonds, are bought and sold. In DVP, actions on both sides of the transaction are timed to occur at the same time: the buyer’s payment is processed when the seller delivers the securities to the buyer.
This method reduces risk on both sides of the transaction there is less risk that the buyer will not pay after the securities are received, and less risk that the seller will not deliver the securities after payment is made.
