What You Need to Know about TT payment
Discover the essential aspects of T/T payments, including when and why they are the go-to option for many businesses engaging with Chinese suppliers. We’ll explore the advantages of T/T payment, such as its security and speed, and also discuss the disadvantages, which can include potential risks and bank fees.

How Does a T/T Payment Work?
The process of making a T/T payment involves several steps:
- Proforma Invoice: Obtain the supplier’s invoice with payment details, including their bank account information.
- Bank Submission: Visit your bank, fill out a transfer form, and provide the required details like IBAN, SWIFT code, and amount.
- Transfer Processing: The funds are processed through intermediary banks before reaching the recipient’s account.
- Confirmation: The supplier receives the payment and confirms receipt, allowing the shipment to proceed.
Why Choose T/T Payment for International Trade?
Advantages of T/T Payments:
- Speed: Transfers are processed within 1–5 business days, depending on the banks involved.
- Global Acceptance: Most suppliers, especially in China, prefer T/T payments due to their reliability and suitability for large transactions.
- High Transfer Limits: Unlike PayPal or credit cards, T/T payments can handle bulk payments without restrictions.
- Direct Settlement: Funds are sent directly to the supplier’s bank account, reducing payment disputes.
Why Suppliers Prefer T/T Payments:
- Fast Access to Funds: Suppliers receive payments faster than other methods like letters of credit.
- Security: Direct bank transfers minimize the risk of payment reversals or chargebacks.
Common T/T Payment Terms You Should Know
Understanding T/T payment terms is essential for managing trade transactions effectively. Here are some of the most common terms:
- T/T in Advance: Payment is made before shipment. This is the most secure option for suppliers but involves higher risks for buyers.
- T/T at Sight: Payment is due upon presentation of shipping documents (e.g., Bill of Lading).
- T/T 30 Days: Payment is made 30 days after shipment, giving buyers more flexibility.
For detailed explanations of trade terms, check out our incoterms guide.
Risks of T/T Payments and How to Mitigate Them
While T/T payments are widely used, they come with certain risks. Here’s how to manage them effectively:
Potential Risks:
- Fraud: Payments are difficult to reverse once processed.
- Incorrect Transfers: Errors in beneficiary details can result in funds being sent to the wrong account.
- Upfront Payment Risks: Paying in advance poses risks if the supplier fails to deliver the goods.
Risk Mitigation Strategies:
- Verify Supplier Information: Double-check the supplier’s bank details and reputation.
- Pay in Milestones: Split payments into installments (e.g., 30% upfront, 70% after shipment).
- Use Escrow Services: For added security, use escrow to hold funds until the goods are verified.
For more tips on secure payments, see our fraud prevention guide.
T/T Payment Fees: What to Expect
The cost of a T/T payment varies depending on the banks and countries involved. Fees typically range from $25 to $50 per transaction. Key factors influencing the cost include:
- Intermediary Bank Fees: Additional charges may apply if the payment routes through multiple banks.
- Exchange Rates: Fluctuating currency rates can impact the total cost.
To save on costs, compare fees across banks or use low-cost transfer services for international payments.
Further Reading
Shipping Document Requirement from China
What is CMR in Road Freight and Rail Freight Transport ?
Express Shipping From China to UK
What are the most common way to send money to China
Avoid Common Mistakes when Shipping From China
Top Mistakes to avoid when choosing Chinese Sourcing AgentÂ
How to import From China to Singapore