Commercial bill discounting is a financing activity in which the payee or holder of a commercial bill, in order to obtain funds before the bill's maturity date, transfers the rights to the bill to a financial institution in exchange for payment, after deducting a certain amount of interest. The bank pays the remaining balance to the payee after deducting the discount interest from the bill's face value. Once discounted, the bill becomes the property of the discounting bank, which can then collect the payment directly from the acceptor upon maturity.