Cross-Border Payment Methods Explained: T/T, L/C and Escrow

Payment terms decide how much risk sits on your side of the table. Here is how the three common methods compare for orders placed with Chinese suppliers.

T/T (Bank Transfer)

The most common method. Typical terms are 30% deposit before production and 70% balance against a copy of the bill of lading. Fast and cheap, but trust matters — start with smaller orders.

L/C (Letter of Credit)

Your bank guarantees payment once shipping documents are presented correctly. Best for large orders or new relationships; banks charge a percentage of the order value for the service.

Escrow / Trade Assurance

Funds are held by a platform and released after you confirm delivery. Ideal for sample and trial orders, though it adds a small service fee and requires you to inspect promptly.