Payment
What is T/T Payment?
Telegraphic Transfer (T/T) is wire payment for international trade — advance, balance, and risk tips.
T/T moves funds bank-to-bank. Common structures: 30% deposit + 70% before shipment or against copy B/L.
What T/T Means
T/T (Telegraphic Transfer) is an electronic funds transfer between banks — SWIFT MT103 in practice. Sellers often say "payment by T/T" for export collections.
Fast and low cost vs L/C but relies on buyer creditworthiness — no bank document check.
Common Payment Structures
100% advance (highest seller risk for buyer), 30/70, 50/50, balance against copy B/L, or after inspection. Each shifts who carries pre-shipment risk.
Process Steps
Proforma invoice → buyer remits to seller bank → seller confirms receipt → production/shipment → balance if any → telex release or original docs.
Verify beneficiary name and account to prevent fraud.
Risk Management
Sellers: use export credit insurance or escrow for new buyers. Buyers: avoid 100% advance without inspection or performance bond.
Align payment milestones with Incoterms and inspection clauses in sales contract.
Examples
30/70
Buyer T/T 30% deposit; factory starts; balance T/T before BL surrender.
Fraud
Fake email changes beneficiary account — seller verifies by phone using known contact.
FAQ
- T/T vs wire?
- Same idea — T/T is traditional trade term for international wire.
- How long for T/T?
- Often 1–3 business days depending on corridors and compliance holds.
- Who pays SWIFT fees?
- OUR/SHA/BEN codes in instruction — agree in contract.
- Partial payment?
- Allowed if contract permits — track FX on each tranche.
- T/T with DDP?
- Payment independent of Incoterm — but timing still tied to delivery docs.
Conclusion
Document T/T terms in sales contract. See L/C vs T/T for method choice.