What is a TT payment (telegraphic transfer)?
A telegraphic transfer (TT) is an electronic bank-to-bank transfer of funds — in modern practice simply a wire. In commodity contracts 'payment by TT' means the buyer wires funds directly rather than using a documentary credit.
At a glance
| Term | T/T Payment |
|---|---|
| Definition | Telegraphic Transfer — bank-to-bank wire payment, often used as deposit or balance payment. |
| Category | Payment & banking |
| Related terms | LC (Letter of Credit), MT-103, MT-700, MT-799, POF (Proof of Funds), BCL (Bank Comfort Letter), Performance Bond |
What it is used for
TT is the simplest and cheapest way to pay. It is common for smaller parcels, for established relationships, and for deposits or balance payments alongside another instrument.
Key points
- Usually structured as a percentage in advance with the balance against shipping documents or on arrival.
- Cheaper and faster than a documentary credit, with far less paperwork.
- Carries no bank undertaking: the security is the relationship and the payment sequence, not a bank's promise.
- Executed over SWIFT, evidenced to the sender by an MT103 confirmation.
What to watch for
- Advance TT puts all risk on the buyer; TT against documents on arrival puts it on the seller. Split payments share it.
- Wire recall is difficult once funds are credited — verify bank details out of band, never from an emailed invoice alone.
- Payment-detail interception is one of the most common frauds in trade; confirm any change of account by phone to a known number.
Frequently asked questions
Is TT safer than a letter of credit?
No. A TT has no bank undertaking behind it. It is cheaper and faster, which is why it is used where the parties already trust each other.
What does '30% TT in advance' mean?
The buyer wires 30% of the contract value before production or shipment, with the remaining 70% payable at the point the contract specifies.
Can a TT be reversed?
Only in narrow circumstances and usually only with the beneficiary's cooperation. Treat a sent wire as final.
Related terms
Lodfy verifies every company on the platform — registration, ownership and sanctions screening — before they can trade.