A TT payment (Telegraphic Transfer) is an electronic bank-to-bank transfer of funds, widely used in international trade to pay suppliers directly, often via the SWIFT network.
A TT payment (Telegraphic Transfer) is an electronic transfer of funds from one bank account to another, commonly used to pay suppliers in international trade. Often routed through the SWIFT network, a TT is essentially a bank wire transfer, and it is one of the most widely used payment methods in B2B sourcing because it is fast and straightforward.
TT payment is frequently compared with the Letter of Credit: a TT is simpler and cheaper, but it does not include a bank's guarantee of performance.
In a Telegraphic Transfer, the buyer instructs their bank to send funds directly to the supplier's bank account. The transfer usually settles within a few working days. Because it moves money directly between parties, a TT relies heavily on trust and on structuring the payment to balance risk between buyer and seller.
TT payments are often split into stages to share risk. A typical structure is 30/70: the buyer pays a 30% deposit before production begins, and the remaining 70% before shipment — commonly against a copy of the Bill of Lading or once the goods are ready. Other splits are also used depending on the relationship and order size. The deposit gives the supplier commitment to start production, while the balance protects the buyer until the goods are ready or shipped.
The main drawback of TT is that it offers less protection than documentary methods. A full advance TT exposes the buyer, while payment only after delivery exposes the seller. Buyers can reduce risk by using reasonable deposits, paying the balance against shipping documents, dealing with verified suppliers, and, for large or first-time orders, considering a Letter of Credit or documentary collection instead.
A TT is a direct transfer with no bank guarantee. A Letter of Credit adds a bank's promise to pay against compliant documents, offering strong protection at higher cost. A documentary collection sits in between, using banks to exchange documents for payment without a full guarantee. The right method depends on trust, order value and how the parties want to share risk.
TT payment is a fast, low-cost and widely used way to pay suppliers in international trade, especially when structured as a deposit plus balance. Because it lacks a bank guarantee, buyers and sellers should stage payments sensibly and work with trusted partners. For higher-value or first-time deals, more secure methods such as a Letter of Credit may be worth the extra cost.