What is TT payment in export?
TT stands for
Telegraphic Transfer. In export transactions, it refers to receiving payment through an international bank transfer.
The important distinction is:
TT = payment method TT payment terms = when and how much the buyer paysFor example, on a US$10,000 export order, a
30% advance and 70% before shipment structure means the buyer sends US$3,000 before production and US$7,000 once the goods are ready but before shipment.
How does a TT payment work?
A typical export TT flow looks like this:
Agree payment terms → buyer sends advance → exporter starts production → buyer sends balance at the agreed milestone → exporter ships goods → export documents followWhat details are needed for a TT payment?
Before the buyer sends the transfer, confirm:
- beneficiary name
- bank name and branch details
- account number
- SWIFT/BIC code
- IBAN where applicable
- invoice or payment reference
- currency and amount
Intermediary or correspondent banks may also be involved, adding processing time or fees.
Which TT payment structure should you choose?
| Structure | Risk position | When it may fit |
|---|
| 100% advance | Lowest seller risk | First orders, samples, smaller deals |
| 30% advance, 70% before shipment | Shared risk | Common for ongoing export orders |
| 30% advance, 70% against bill of lading | More seller exposure | Buyer wants proof that goods have shipped |
| 100% after delivery | Highest seller risk | Established buyers with a strong payment history |
100% advance
The full amount arrives before production or shipment. This gives the exporter the most protection.
30% advance, 70% before shipment
The buyer funds part of production upfront and pays the balance once the goods are ready.
30% advance, 70% against bill of lading
The exporter ships first and receives the balance after providing proof of shipment, so seller risk is higher.
100% after delivery
The exporter delivers before receiving payment. This is generally best reserved for trusted buyers.
How should you decide your TT payment terms?
Use four checks:
- Buyer relationship: New buyers usually justify stronger advance terms.
- Order size: Larger orders may work better with milestone-based payments.
- Resale risk: Custom or perishable goods justify stronger seller protection.
- Working capital: If you must buy material upfront, negotiate a larger deposit.
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What does a TT payment cost?
The final cost can include more than the bank's headline wire fee.
| Cost component | What it means |
|---|
| Outgoing wire fee | Charged by the buyer's bank |
| Incoming fee | May be charged by the receiving bank |
| FX conversion | Difference between the applied exchange rate and the reference market rate |
| Intermediary-bank fee | Deduction made by correspondent banks in the payment chain |
For exporters, the useful calculation is:
Invoice amount − bank charges − intermediary deductions − FX cost = amount effectively receivedWhat are the risks of TT payments?
Payment default
TT does not automatically guarantee that the buyer will make the next payment. Your protection comes mainly from the terms you negotiate.
Fake or changed bank details
Treat any mid-deal request to change beneficiary details as suspicious until it is independently verified.
FX movement
If weeks pass between pricing the order and receiving payment, exchange-rate movement can affect your final INR realisation.
Incorrect payment information
A wrong account number, SWIFT code, or beneficiary name can delay or return the payment.
Recall limitations
Once a transfer has moved through the banking system, recovering it can be difficult. Verify all details before funds are sent.
TT payment terms vs letter of credit
| TT payment terms | Letter of credit |
|---|
| Simpler structure | More document-driven |
| Generally lower banking cost | Generally higher banking cost |
| Relies heavily on buyer-seller trust | Adds bank-backed payment conditions |
| Often used with established buyers | Useful for larger or newer trade relationships |
| Faster to arrange | Can take longer due to document checks |
What happens after the TT payment reaches India?
Indian exporters may still need to complete several post-payment steps:
- ensure the correct purpose code is used
- retain the relevant FIRC/FIRA or inward-remittance evidence
- complete e-BRC requirements where applicable
- ensure the export proceeds are correctly matched against the relevant shipment or export record
How PayGlocal simplifies export collections
PayGlocal helps Indian businesses collect international payments through local bank rails and other supported methods, including:
- local collections in currencies such as USD, GBP, EUR, CAD, and AUD
- broader collections across 33+ currencies from 180+ countries
- real-time payment tracking
- INR settlement
- automated inward-remittance documentation
- Multi-Currency Accounts for exporters receiving regular overseas payments
