(general) The sale at less than original price value of a commodity or monetary instrument, often for immediate payment.
(banking/letters of credit) The beneficiary under a usance/term letter of credit has the possibility of discounting his claim for immediate payment. The bank credits the beneficiary with the value of the documents, less the discount, but on an unconfirmed credit, reserves the right of recourse. ( See recourse.) In the case of a confirmed letter of credit the discount would be without recourse.