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How to pay Chinese suppliers by T/T payment


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A T/T payment is a common way to pay Chinese suppliers. T/T stands for 'Telegraphic Transfer.'
This slideshow will explain what this payment type is, how to make it, and answer some common questions that importers have about the process.
In addition, it also explains what common payment terms are, and a better payment term that importers should try to negotiate with their suppliers if they can.

Read this whole blog post here for more information:

You may also like the video walkthrough version of this slideshow. Watch it here:

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How to pay Chinese suppliers by T/T payment

  1. 1. How to Pay Chinese Suppliers by T/T Payment (Bank Wire Transfer)
  2. 2. What is a T/T payment? A T/T payment is a ‘Telegraphic Transfer’ or ‘wire transfer’ of funds between banks using the SWIFT system. They are commonly requested by Chinese suppliers and are a standard way for importers to transfer money abroad. They are often made in another currency, for instance, USD. 2
  3. 3. What to know about T/T payments They’re pretty safe, SWIFT was developed in the 70s – global network of banks that ‘talk to each other.’ You will likely pay fees to both the issuing bank and the receiving bank for the transfer. Payments will take about 3-5 days to clear. 3
  4. 4. Fees!? SWIFT payments usually incur fees, meaning that your T/T payment will not be free. These vary from bank to bank, but can include: • Charge by issuing bank • Charges by banks in the SWIFT networks that handle the payment • Charge by receiving bank • Markup on the exchange rate between currencies It would not be unusual for fees to be US$25-50 per payment. 4
  5. 5. Making your T/T payment (1) Most banks, like HSBC, allow you to make your T/T payment online. Fill out the exact information as requested, this often usually include: • Recipient name • Bank details including IBAN or BIC/SWIFT code • Recipient address • Recipient’s bank address Save a transaction record and send it to the supplier. 5
  6. 6. Making your T/T payment (2) Be careful not to process the transfer with typos – this will hold up the payment! Chinese company names can be very long – make sure you write them in full and in English. No errors! Watch us fill out an example T/T payment here: 6
  7. 7. Payment terms The more you can pay after shipment, the more favourable & secure the term to you, the importer. Some larger buyers pay by L/C on sight, or a 100% T/T payment 2 months in arrears after shipment. Read more about payment terms in this post: 7
  8. 8. 8 Here is the usual payment term that Chinese manufacturers request - 30% T/T deposit, 70% T/T payment after goods have passed QC inspection.
  9. 9. 9 Similar payment term, but a different end of the process – a more secure option for importers because you know your goods have been shipped before paying the remainder.
  10. 10. How to negotiate payment terms? It’s possible to negotiate better payment terms if: • Your company is well-established and famous • You arrange financing of your suppliers • You have a buying office in China 10
  11. 11. T/T FAQs (1) Q: What should importers NEVER do? A: Never pre-pay 100% of the order before production starts AND never wire the down payment before having a relatively high certainty that the factory knows what you expect of them Q: Are there scams to catch out importers sending T/T payments? A: Yes, scammers send a fake invoice from ‘your client’ fooling you into wiring payments to them. Be very careful and check against ‘real’ information before wiring. Q: My supplier received a lower amount than we wired. How so? A: It is likely that transfer fees were deducted from the final payment – you can choose to pay ALL fees. 11
  12. 12. T/T FAQs (2) Q: My supplier wants me to wire a payment to their personal account. Is this OK? A: Perhaps only for very small payments. In general you should demand an invoice from their company and pay that company. Q: My supplier wants me to send the payment to a different company. Is this a scam? A: Probably not. Maybe they use a Hong Kong company to avoid declaring sales in China and reduce tax, perhaps they have another company with an export license for your goods which their other company doesn’t have, or maybe their SOP is to collect payments and do all export procedures under another company. Be safe! Get both companies to sign and stamp a joint declaration acknowledging that company B collects your payment on behalf of company A. 12
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