T/T or L/C, Which do you prefer?
Post 1 of 81
Telegraphic Transfers (T/T) and Letters of Credit (L/C) are the two most common payment methods in international trade; but what are their advantages? Is L/C the best choice for a secure transaction? Is T/T the best for simplicity and speed?
Which payment method do you prefer for your business transactions?
10 Jan 2008 19:08
Post 2 of 81
Replying to [Admin]:Most of our clients want Pay pal. Neither T/T nor L/C. ![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif)
14 Jan 2008 23:59
![[em7]](http://img.alibaba.com/images/eng/style/icon/emoticons_shy.gif){kind=icon}
Post 4 of 81
Replying to [Audrey ]:I am struggling with 2 possibilities.
1. You don't understand the language (so desperately conveyed by catalyst).
2. too smart to understand the straight point; need 10 types of different elaboration.
Thanks so much Catalyst for your patience, I need a lot more person like you coming in, thanks.![[em19]](http://img.alibaba.com/images/eng/style/icon/emoticons_great.gif)
1. You don't understand the language (so desperately conveyed by catalyst).
2. too smart to understand the straight point; need 10 types of different elaboration.
Thanks so much Catalyst for your patience, I need a lot more person like you coming in, thanks.
15 Jan 2008 06:43
Post 5 of 81
Replying to [Catalyst]:
This question is very relevant to me. But I can see why you have a problem for it. You can really compare L/C to TT - the question is really L/C vs. advance payment by TT.
I have asked my new manufacturer for L/C, while they have argued for advance payment by TT.
Obviously advance payment by TT is the best for the exporter, while open account by TT is best for the importer. In the middle lie bills for collection and L/C.
I choose L/C.
Advance payment by TT is too much of a risk to expect any buyer to bear (even if you have a contract, the costs of enforcing it internationaly would be prohibitive).
L/C is still better for an exporter than bills for collection.
If exporters complain about the length of time for payment of an L/C then I ask this; you wouldnt agree to an open account, so why expect me to agree to advance payment.
L/C balances the risk more fairly.![[em3]](http://img.alibaba.com/images/eng/style/icon/emoticons_grin.gif)
This question is very relevant to me. But I can see why you have a problem for it. You can really compare L/C to TT - the question is really L/C vs. advance payment by TT.
I have asked my new manufacturer for L/C, while they have argued for advance payment by TT.
Obviously advance payment by TT is the best for the exporter, while open account by TT is best for the importer. In the middle lie bills for collection and L/C.
I choose L/C.
Advance payment by TT is too much of a risk to expect any buyer to bear (even if you have a contract, the costs of enforcing it internationaly would be prohibitive).
L/C is still better for an exporter than bills for collection.
If exporters complain about the length of time for payment of an L/C then I ask this; you wouldnt agree to an open account, so why expect me to agree to advance payment.
L/C balances the risk more fairly.
15 Jan 2008 09:40
Post 6 of 81
Replying to [Admin]:
1. TT is lower risk to Exporter while More risk to Importer
2. TT: importer relies on exporter to ship the goods or not
3. TT: There is no assurane of Quality and Quantity of shipment
4. I prefer L/C: L/c is undertaking of Payment by Bank given to
the Seller beneficiary at the request and on the instructions of
the buyer to pay at sight or at a determinable future date.
5. I prefer L/C: Seller can look to the bank for payment instead of
relying upon the ability or willingness of the buyer to pay
6. L/c provide a form of security for the parties involved
7. L/c is an arrangment by bank for setting international commercial
transaction.
One buyer of Cotton Waste from China sent 20% of total amount
of goods by TT in advance to the Exporter in "A" country.
After receiving 20% advance amount the exporter disappeared.
I noticed several cases of fruads occured in South Asian countries
because of only TT....
1. TT is lower risk to Exporter while More risk to Importer
2. TT: importer relies on exporter to ship the goods or not
3. TT: There is no assurane of Quality and Quantity of shipment
4. I prefer L/C: L/c is undertaking of Payment by Bank given to
the Seller beneficiary at the request and on the instructions of
the buyer to pay at sight or at a determinable future date.
5. I prefer L/C: Seller can look to the bank for payment instead of
relying upon the ability or willingness of the buyer to pay
6. L/c provide a form of security for the parties involved
7. L/c is an arrangment by bank for setting international commercial
transaction.
One buyer of Cotton Waste from China sent 20% of total amount
of goods by TT in advance to the Exporter in "A" country.
After receiving 20% advance amount the exporter disappeared.
I noticed several cases of fruads occured in South Asian countries
because of only TT....
15 Jan 2008 10:31
Post 7 of 81
Replying to [Winter Sonata]:
I can't agree with you more!
I can't agree with you more!
15 Jan 2008 19:07
Post 9 of 81
Replying to [Admin]:Hard to say,it depends on the conditions.
15 Jan 2008 22:34
Post 10 of 81
Replying to [Admin]:![[em18]](http://img.alibaba.com/images/eng/style/icon/emoticons_deal.gif)
Prefer part TT as Deposit and balance by TT upon shipment. The risk is aportioned between buyer/seller.
LC still carry some risk mainly if issued by low credit rating countries bank.
Prefer part TT as Deposit and balance by TT upon shipment. The risk is aportioned between buyer/seller.
LC still carry some risk mainly if issued by low credit rating countries bank.
16 Jan 2008 03:16
Post 11 of 81
Replying to [int786]:I agree with your mentioned points.So i wish each parties in foreign trade should be honest.Let's creat a better circumstance for international trade.
16 Jan 2008 23:42