TT, L/C, escrow: Understanding international payment terms
The 4 ways you can pay an overseas supplier — and which one BestDealz Trade Assurance is built on.
TT (Telegraphic Transfer)
A direct bank wire from your account to the supplier's. The most common payment method in international trade — fast, cheap (R 350–600 per wire), but irreversible.
Standard structure
- 30% deposit on order placement (kicks production)
- 70% balance before shipment (against B/L copy)
Risks
If the supplier disappears with the deposit, you have zero protection. SARS chargebacks don't apply to international wires. You'd need to litigate in China — expensive and slow.
L/C (Letter of Credit)
Your bank guarantees payment to the supplier's bank, but only when the supplier presents specific documents (B/L, packing list, inspection certificate, etc.) that match the L/C exactly.
Best for
- Large orders (USD 50,000+)
- New suppliers where TT feels too risky
- Government or regulated procurement
Downside
Setup cost is 0.5–2% of order value + fees. Document mismatches are common and cause "discrepancies" that delay payment. Most factories prefer TT.
Escrow services
A third party (the escrow agent) holds your payment until you confirm receipt of the goods. The supplier sees the funds are committed but can't access them until you release.
Examples
- Alibaba Trade Assurance — basic escrow tied to their platform
- Escrow.com — independent third-party escrow
- BestDealz Trade Assurance — integrated escrow with dispute mediation
Open account / Net terms
The supplier ships first and invoices you with payment due in 30 / 60 / 90 days. Rare for first-time relationships, common for established 12+ month partnerships.
How to earn it
- 6+ months of on-time TT payments
- Annualised purchase value > USD 100,000
- Trade references from other suppliers
- Sometimes a corporate guarantee or bank letter
BestDealz Pro suppliers can offer net-30 to verified SA business buyers with a 12-month order history — talk to our sales team.
What we recommend
| Scenario | Recommended method |
|---|---|
| First-time, < USD 10,000 | BestDealz Trade Assurance escrow |
| First-time, USD 10–50k | 30/70 TT + PSI inspection |
| First-time, > USD 50,000 | L/C or escrow + DUPRO inspection |
| Repeat supplier, 6+ orders in | TT 30/70 (or net-30 if available) |
| Buying via BestDealz Class B | Already included — Trade Assurance escrow + PSI on orders > USD 5k |
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