TT payment terms mean you pay before the seller ships your goods
TT stands for telegraphic transfer, an older name for wire transfer. When an invoice says "TT payment terms," it means the seller expects you to send money by wire transfer before they release your order. The goods do not move until the funds clear in their bank account — usually the same day or next business day.
This is a seller-protective term, common in international trade and wholesale transactions. You bear the risk: if the seller never sends the goods after you wire the money, you have limited recourse. Wire transfers are nearly impossible to reverse once sent. The seller bears no risk because they already have your cash.
TT terms are different from payment methods like credit card or check. They describe when payment happens relative to shipment. Other common terms are COD (cash on delivery — you pay when the package arrives), Net 30 (you pay 30 days after invoice), and prepaid (same as TT, but the term itself does not specify the method).
Key Takeaways
- TT payment terms require you to wire money before the seller ships, with no goods movement until funds clear.
- Wire transfers cannot be reversed once sent, so you lose recourse if the seller fails to deliver after you pay.
- TT is common in international orders, wholesale purchases, and transactions with new or unfamiliar sellers.
- You can ask the seller to use a different payment term, escrow service, or letter of credit if you want more protection.
Why sellers use TT terms
Sellers choose TT terms to eliminate payment risk. They do not have to wait for a check to clear, dispute a chargeback, or worry about a credit card reversal. The money is in their account before they pack a single item. For international sales, this matters even more: a wire transfer from overseas can take days to clear, and currency conversion adds complexity.
Sellers also use TT terms when the buyer is new or has no credit history. If you are ordering from a factory in China or a wholesaler you have never worked with, they will often demand TT payment. They have no way to verify your creditworthiness and no relationship to fall back on if something goes wrong.
Some sellers use TT terms as a negotiating position. They may offer a small discount (2 to 5 percent) if you agree to TT instead of Net 30 or Net 60. This discount reflects the value of getting paid immediately instead of waiting weeks.
The risk you take with TT payment
When you wire money under TT terms, you are trusting the seller to follow through. If they do not ship the goods, or ship damaged or wrong items, your options are limited. Your bank cannot reverse a wire transfer the way they can reverse a credit card charge. You would have to sue the seller in their home country or pursue a fraud claim, both of which are expensive and slow.
Wire fraud is real. Scammers pose as legitimate sellers, collect wire payments, and disappear. Legitimate sellers can also fail to deliver due to bankruptcy, operational collapse, or simple dishonesty. You have no chargeback protection, no escrow holding the money, and no may provide.
The risk is highest when you are buying from a seller you have never worked with, especially internationally. A seller with a long track record and verifiable reviews is lower risk than a new seller with no history.
How to protect yourself if you must use TT terms
If the seller insists on TT payment, take steps to reduce your risk. First, verify the seller is real: check their website for physical address, phone number, and business registration. Look for customer reviews on independent sites, not just testimonials on their own page. Search their name plus "scam" or "fraud" to see if complaints exist.
Second, ask for a detailed invoice that lists exactly what you are buying, quantities, specifications, and delivery date. Get this in writing. If the seller refuses to provide specifics or keeps changing details, that is a warning sign.
Third, use an escrow service if the seller will agree. An escrow holds your money until you confirm receipt of the goods, then releases it to the seller. Services like Escrow.com charge a fee (usually 1 to 5 percent of the transaction), but they protect both parties. Many international sellers will accept escrow because it protects them too.
Fourth, wire only what you need for the first order. If you are testing a new supplier, order a small quantity first. Once they deliver and you are satisfied, you can place larger orders with more confidence.
Alternatives to TT payment terms
You can always ask the seller to use a different payment term. Many sellers will negotiate if you are a serious buyer. Here are common alternatives:
- Letter of credit (LC): Your bank issues a document promising to pay the seller once they ship and provide proof (bill of lading, shipping documents). The seller gets paid only after shipping, and you get proof of shipment before your bank pays. This is standard in international trade but costs 1 to 3 percent in bank fees.
- Escrow: A neutral third party holds your money until you confirm the goods arrived in good condition. Then they release it to the seller. Protects both sides.
- Credit card: If the seller accepts credit card, you get chargeback protection. You can dispute the charge if goods do not arrive or are not as described. Sellers often charge a 2 to 4 percent fee to cover card processing costs.
- Net 30 or Net 60: You pay after delivery, giving you time to inspect the goods. Sellers are less likely to agree to this with new buyers, but it is worth asking.
- Split payment: Pay 50 percent upfront by TT, the rest after delivery. Reduces your risk while giving the seller some assurance you are serious.
The seller may refuse these alternatives, especially if they are in a high-risk country or dealing with a new buyer. But asking costs nothing, and some sellers will negotiate.
What happens after you wire the money
Once you initiate a wire transfer, the money typically reaches the seller's bank within one business day for domestic transfers, or two to five business days for international transfers. Your bank will give you a confirmation number and a record of where the money went. Keep this documentation.
The seller should confirm receipt of the payment and provide a shipping date. Ask them to send you a tracking number as soon as the package ships. If you do not hear from them within the timeframe you agreed on, contact them immediately. Do not wait.
If the seller does not ship after a reasonable time (usually 5 to 10 business days), contact your bank and file a wire fraud claim. Your bank can investigate, but recovery is not may provide. This is why verification and small first orders matter.
TT terms in different industries
TT payment terms are most common in wholesale, manufacturing, and international trade. If you are buying fabric from a mill in India, machinery from a factory in Germany, or components from a supplier in Vietnam, TT terms are standard. Domestic retail and e-commerce rarely use TT; they use credit cards, checks, or ACH transfers.
In construction and contracting, TT is less common, but progress payments (paying a percentage upfront, the rest as work completes) serve a similar function. In real estate, earnest money deposits work the same way: you wire money to show you are serious, and it is held in escrow until closing.
If you are new to an industry that uses TT terms, ask other buyers in your network what they do. They can tell you which sellers are trustworthy and which payment protections work in that space.
Frequently Asked Questions
Can I get my money back if I wire it and the seller does not ship?
Not easily. Wire transfers are nearly impossible to reverse once sent. You would have to file a fraud claim with your bank and potentially sue the seller, both of which are slow and expensive. This is why verification and escrow are important before you wire.
Is TT payment the same as prepaid?
TT specifies the payment method (wire transfer), while prepaid just means you pay before shipment. You could prepay by check, credit card, or ACH transfer. TT is always prepaid, but prepaid is not always TT.
What if the seller asks me to wire money to a personal bank account instead of a business account?
That is a red flag. Legitimate businesses use business accounts. Wiring to a personal account suggests the seller may be running an informal or fraudulent operation. Ask them to provide a business account, and if they refuse, find a different seller.
Can I negotiate TT terms down to a smaller percentage?
Yes. You can offer to pay 25 or 50 percent upfront by TT and the rest after delivery or on Net 30 terms. Many sellers will negotiate if you are a serious buyer placing a large order. It never hurts to ask.
How do I know if an escrow service is legitimate?
Use established services like Escrow.com, which has been operating since 1999 and is licensed in most states. Check that the service holds the money in a trust account, not their operating account. Avoid services that ask you to wire money directly to an individual or use cryptocurrency.