If you’re importing from China, probably, you could be worried how to play your suppliers or factories.
You can try T/T payment to China.
But, how do you avoid the risk of losing money?
Or how can you get the most from the T/T payment?
So, if you want to learn the tricks and tips for making T/T payments, read this guide.
- What is T/T Payment?
- What are the Benefits of T/T Payment to China?
- Are there Disadvantages of making T/T Payment to China?
- When should you use T/T Payment to China?
- Why do Chinese Suppliers use T/T Payment?
- How does T/T compare to other Methods of Payment in China?
- How do you make T/T Payment to China?
- What is the Cost of T/T Payment to China?
- How do LC and T/T Payments to China compare?
- How long does T/T Payment to China take to complete?
- How does T/T Payment to China and SWIFT Payment compare?
- What is the Safest Payment Method when Importing from China?
- Which Terms do you use during T/T Payment to China?
- How do you reduce the Risk of using T/T Payment to China?
- How do you Negotiate Better Payment Terms when Importing from China?
- What are the Tips and Tricks about T/T Payment to China?
- Can you use T/T Payment to China when importing from Alibaba?
- Is T/T Payment to China Safe and Secure?
- Can you Ask for Refund after T/T Payment to China?
- Which Factors Affect the Speed of T/T Payment to China?
- How do you Verify Chinese Company before making T/T Payment to China?
- Are there Scams when making T/T Payment to China?
- Which Details do you need to Make T/T Payment to China?
- In case you Submit Wrong Details when making T/T Payment to China, What can you Do?
- If a Supplier Cancels Order after making T/T Payment to China, What can you Do?
- Can you make T/T Payment to China in Chinese Yuan?
What is T/T Payment?
T/T payment otherwise known as telegraphic transfers refers to an international, electronic money transfer method from the buyer’s bank to the seller’s bank.
What are the Benefits of T/T Payment to China?
The use of T/T payment in China has brought several benefits to both buyers and seller not excluding;
- To start with, a telegraphic transfer is one of the secure methods of transferring funds across different countries.
You will have to include a couple of your credentials and by so doing strong security is created.
- Telegraphic transfers are available in most major currencies.
- Simple to transact – Apart from it being secure, T/T payment is simple. All you have to do is get to your nearest service provider.
Make sure you have the recipient’s account number together with any other details required by your bank.
You will be required to fill in a form and that’s it.
- Efficient – Telegraphic transfer is widely embraced in most countries and this makes it effective for any manufacturer in China.
The manufacturer or supplier can transact funds with any trader or importer across the globe.
This in turn boosts their businesses.
- Higher transfer limit –T/T payment makes it easier for anyone to make large money transfers.
This is a plus especially for importers dealing with bulk purchases. In turn, China can increase trade among several importers from different countries.
- Quick – Within one to four business days, your funds will have already transferred to the recipient.
Remember, this might even take less than a day making it one of the quickest methods of transferring money.
These speed of your transaction depends on several factors such as distance, working hours, and holidays just to mention a few.
- Owing to the faster transfer rate of funds, T/T payment is less affected by fluctuations experienced in the international money market.
- In addition to that, T/T payment charges less for its services, therefore, making it one of the cheapest. This attracts several traders who in turn boost China’s economy.
Are there Disadvantages of making T/T Payment to China?
In as much as T/T payment might seem quite advantageous, it has its drawbacks too which include;
- It’s one of the commonly used methods of payment by scammers and fraudsters.
This is probably due to its fast transaction speed.
Not only is this a risk for the supplier but also the buyer.
- On certain occasions, your transactions could take longer to be processed.
- A fee is always imposed by the bank for every transaction meaning your recipient will not receive the full amount.
- If by chance you happen to enter an incorrect account number, you cannot reverse the payment.
When should you use T/T Payment to China?
T/T payment is commonly used when paying Chinese suppliers.
All Chinese suppliers with a bank account have the T/T payment method option for their businesses.
Why do Chinese Suppliers use T/T Payment?
Chinese suppliers prefer the use of T/T payment owing to the following reasons;
- T/T payment is not only safe but also secure.
- Chinese suppliers need fast payment method and therefore T/T payment serves best.
- T/T payment has a higher transfer limit allowing Chinese suppliers to work efficiently with bulk buyers.
- In addition to that, T/T payment is easy to process for both the buyer and supplier.
How does T/T compare to other Methods of Payment in China?
There are several payment methods in China some of them including;
- Letter of Credit
- Visa Card
- Online Bank Payment
- Western Union
As compared to other payment methods in China, T/T payment is processed by the bank.
The supplier gives out their bank details and the buyer presents all information to their bank.
Afterwards, the buyer’s bank performs the transaction to the supplier’s bank account through electronic means.
In addition to that, T/T payment has a higher transfer limit as compared to other payment methods.
This makes it the ideal choice for any bulk purchaser.
How do you make T/T Payment to China?
Making T/T payment to China is much simpler and faster than you think.
All you have to do is contact your bank and present to them your idea of transferring cash to a Chinese company.
You will be required to fill out a form.
Thereafter, make payments of the transfer money together with any other fee applicable.
Always ensure that you request your supplier to send the proforma invoice early enough.
This proforma invoice will include the supplier’s bank details which you will need when approaching your bank for the transfer of funds.
The whole process takes about two to four days depending on the distance between the two destinations and other factors.
Most importantly, always confirm that you are dealing with a company and not an individual.
Most scams happen as a result of sending money to individual accounts and it might take time before you discover that you have been scammed.
What is the Cost of T/T Payment to China?
The cost of T/T payment varies from one TT provider to the other.
Most banks will charge a fee of $30 which can as well be more or less depending on your provider and where they are located.
Averagely, the cost ranges from as low as $25 to as much as $50.
Remember, T/T payment involves funds being moved from one bank to the other until it arrives at the destination.
Therefore, the fee charged includes the total amount from all the banks your fund has passed through.
How do LC and T/T Payments to China compare?
As compared to the T/T payment, LC otherwise referred to as a letter of credit is more secure.
Letter of credit process
This is because you will be required to fill out extra information before transferring your funds.
With a letter of credit, you won’t need to deposit any amount to the supplier.
Therefore, your risks as a buyer are greatly reduced.
LC payment is made when certain conditions are met as compared to T/T payment which lacks such conditions.
How long does T/T Payment to China take to complete?
A complete T/T payment will take two to five working days to complete.
This highly depends on your bank and the distance between the two destinations.
Also, other factors such as public holidays might delay your payment.
How does T/T Payment to China and SWIFT Payment compare?
SWIFT payment is under T/T payment methods.
It facilitates T/T payment transaction by using special codes to transfer funds to the recipient’s bank account.
When doing a T/T payment, the funds are passed through various banks until they arrive at the destination.
These banks make up the SWIFT network.
Therefore, T/T process relies on the SWIFT system for the fast and efficient transfer of funds.
What is the Safest Payment Method when Importing from China?
Some of the safest payment methods when importing from China include; T/T, LC, escrow, debit or credit card, and PayPal.
With the T/T payment, the risks are shared between the supplier and the importer.
Nevertheless, Escrow protects both parties as money is withheld by a third party until you receive your goods.
How escrow works
In as much as the use of debit and credit cards is not fully embraced by most suppliers in China, it is a safer method for you as an importer.
Most Chinese suppliers also don’t advocate the use of PayPal owing to a couple of reasons.
The main one being it provides more protection to the importer than the supplier.
In as much as PayPal might be safer for you, also keep in mind that the fee charged depends on the size of your transaction.
The more your transaction the more fees you will pay.
Additionally, sorting disputes is difficult and you might end up losing.
A letter of credit is widely accepted by most suppliers owing to the lower risks involved.
However, LC is suitable for bulk buyers as compared to small scale importers.
It involves a lot of paperwork. As such, suppliers find it unsuitable or rather unworthy for transactions below $50,000.
Which Terms do you use during T/T Payment to China?
Some of the terms you will include during your T/T payment in China include;
- T/T in advance – T/T in advance is a payment method whereby payment needs to be made before the shipment of goods begins.
- T/T 30 days –T/Tin 30 days requires the importer to clear the full amount within 30 days after completion of the manufacturing processes.
- T/T at sight –With T/T at sight, the importer is required to pay a certain amount after receiving the bill of exchange.
How do you reduce the Risk of using T/T Payment to China?
Telegraphic transfers are one of the commonly used payment methods by scammers and fraudsters.
To avoid falling into such traps, here are some important tips you should consider.
- Never pay 100% of the amount–Most buyers find themselves in a fix after clearing every payment before the manufacturing begins and later getting delays in their shipment.
If you clear your entire bill, some suppliers will be hesitant to finish your order since they already have all the payments done.
In addition to that, paying the full amount might land you in greater problems if you happen to send it to the wrong account.
Therefore, always ensure that you only pay a partial deposit.
- Confirm company details before making any payments–Go through the company details and confirm that the supplier is the holder of the account.
This will save you from landing on scammers.
- Request for the profoma invoice in advance– By so doing you will be able to acquire more information about the supplier in good time.
- Pay for the samples to confirm that the account is the appropriate one. In as much as your supplier accepts to send free samples, you could choose to pay for them just so to confirm their bank details.
How do you Negotiate Better Payment Terms when Importing from China?
As with any buyer or importer, payment negotiation is key if you want to land at the best prices.
Most Chinese suppliers are always willing to negotiate on payment terms. To do so;
- First, find the right supplier – Not all suppliers are ready to negotiate on payment terms and therefore you need to identify the ones suitable for you.
- Establish a good relationship with your supplier – The best time to start building a good relationship with your supplier is when you are not in urgent need of them.
Make sure you communicate frequently, reply to calls, and text messages.
Keep in mind that the more you interact the more likely you are to easily negotiate on the payment terms with your supplier.
- Ensure that the payment terms are fair for both parties. It should provide a win-win solution. By so doing, you grant your supplier a better chance to offer you better payment terms.
- Ask for the most – Negotiation will involve lowering your prices or terms to meet at equilibrium and therefore you need to start higher.
- Understand the business language – Research well on your supplier’s business since this will help you explain to them how they will benefit from your proposal.
What are the Tips and Tricks about T/T Payment to China?
For you to have a successful T/T payment system to China, some tips and tricks will be of importance.
Have a look at them;
- Countercheck everything before you begin your transaction. Make sure that there are zero missing words and everything is accurately spelled.
- Companies with longer names should be written in the address 1 field.
- Always write your company name in English in the application form.
- Always request your supplier to send you the proforma invoice early enough.
- Never pay the full amount before the start of production as this may delay your order. This is because your supplier won’t prioritize your order since they already have the full amount at hand.
- Before making any down payment, always ensure that the supplier has a clear picture of what you want to be done. Failure to this might result in major losses.
Can you use T/T Payment to China when importing from Alibaba?
Yes, you can.
Apart from PayPal, and debit/credit card, T/T payment is one of the payment methods used in Alibaba.
However, you need to be extra careful as several fraudsters target T/T payment users on this platform.
Do thorough research about your supplier before beginning any form of transaction.
Is T/T Payment to China Safe and Secure?
T/T payment is fairly safe.
It provides little to no security for both the buyer and the supplier.
Therefore, you need to be keen when performing any transactions via T/T payment method.
Can you Ask for Refund after T/T Payment to China?
T/T Payment System
Yes, you can ask for a refund after making a T/T payment to China.
If you realize that you made a mistake in your transfer, be fast to inform your bank.
However, you need to do so before your funds get deposited into the recipient’s account. Otherwise, it might be difficult to get your refund.
It’s also worth pointing out that getting a refund might take long.
Which Factors Affect the Speed of T/T Payment to China?
The amount of time taken for your transaction to arrive at its destination will be influenced by a couple of factors. Here are some of them;
- Time differences – Sending money across different hemispheres might result in some delays as this also affects the working hours.
- Differences in currencies – Conversion of currencies from one country to the other might delay your transfer.
- Additional information– Sometimes banks might require you to verify certain information which might consume time leading to delays.
- Differences in business days – Business days vary from one country to the other. While in most countries business days are from Monday to Friday, some countries might have fewer business days.
This definitely would result in delays in your transaction.
- The country of destination – Some banks have not yet embraced the current trends in money transfer.
Some make use of old systems which are slower and therefore cause delays.
- Public holidays – During public holidays most if not all businesses remain closed. Sending money during such occasions would result in delays.
- Finally, note that some payment methods take longer to process than others.
Therefore, your transaction might be faster or slower depending on which one you choose.
How do you Verify Chinese Company before making T/T Payment to China?
Ensuring that you are dealing with a verified supplier is an important factor that every importer needs to consider.
This shouldn’t be a hassle anymore; here are some ways that you could easily verify Chinese company before embarking on your transaction.
- Ensure that the account details are for the company. Often, people get scammed by individuals purporting to be companies.
When dealing with a company, confirm that the account information belongs to the company and not an individual.
Company accounts have names such as Wenzhou Hengyi Bag Co. Ltd while individual accounts have names such as GU YU.
- Confirm that the location of the company corresponds with the location of the bank.
For instance, if you are sending payment to a company in Beijing, the bank should also be in the same locality, Beijing.
- Also, the company you have been dealing with should be the same company you should make the payment to.
Sometimes, suppliers might provide a different company name to make your payment and therefore you should exercise extra caution.
Are there Scams when making T/T Payment to China?
Yes, you might experience scams when making T/T payment to China.
To avoid getting into such a fix, always make sure that you have done proper research about your supplier.
Also, ensure that you are dealing with a verified supplier.
Which Details do you need to Make T/T Payment to China?
To make T/T payment to China, the following are some of the main details you should have;
- Recipient’s contact details
- Recipient’s bank account details (name, address, BIC/SWIFT code)
- Suppliers business info
- Amount to be transferred
- The currency of the payment
In case you Submit Wrong Details when making T/T Payment to China, What can you Do?
The first thing you can do is contact your bank and inform them about the mistake.
They will allow you to make corrections where necessary and thereafter correct in their system.
However, this might delay your payment.
Your bank will need to trace your transaction and you might also be required to spend additional money for this process depending on its complexity.
If a Supplier Cancels Order after making T/T Payment to China, What can you Do?
No need to worry much. If a supplier cancels your order, make a point of communicating with your bank as soon as possible.
If the money has already arrived at your supplier’s account, it can’t be reversed.
However, you can still liaise with your supplier and they will be in the best position to assist you in getting your payment back.
Can you make T/T Payment to China in Chinese Yuan?
Yes, you have an option to choose the type of currency you want to use when making T/T payment.
This can either be USD or Chinese Yuan.
With this information, am sure you can securely make T/T payment to China.
However, if you have any question, feel free to contact BanSar team, we are here for you.