T/T payment is a very common abbreviation, which stands for “telegraphic transfer”. The money is transferred between two bank accounts in a reasonably satisfactory speed (usually within 5 working days). T/T payment is often used in trade relations with China.
According to the survey by GlobalSourcing, T/T transfer is the most popular way of sending money to China; in an open question, 99% of suppliers answered that T/T is their first method of choice. There are some bank charges related with the T/T, but it is still way cheaper than its alternatives, such as L/C (letter of credit). International transfer requires bank account number and SWIFT code. It takes 2-5 days for the transfer to reach the destination. Telegraphic transfer can be made in your currency or in Chinese Yuan – in the latter case, you will probably pay less fees and your supplier will be more satisfied.
What kind of details should be known in order to make a successful Telegraphic Transfer? Usually, the bank requires you to provide the following: Sender’s Full Name and address, Beneficiary Bank’s name (not abbreviated), Beneficiary Bank’s full address (incl country name), account number, Beneficiary’s full name and address, purpose of payment.
Usual form employed in purchasing goods from China is: 30% down payment, 70% paid after the goods are on board, ready to be delivered. The Chinese SMEs are often reliant on steady inflow of funds, so they use your down payment to purchase materials and start production. You should remember though that the final payment should not be made prior to delivery. Otherwise, the buyer is at the mercy of the seller, who can withhold delivery and claim all of the money.
You should also remember that T/T transfer should be made only to the company’s official account. Do not agree for wiring the transfer to someone’s private account – in China it is easy to set up an account and claim the money. Remember to use all necessary China Credit Check measures to make sure that the company is reliable.