Instructions for TT payment when importing Vietnamese steel
BlogDate: 10-10-2023 by: Ngoc Cam
Vietnam is one of the ideal steel import markets of many countries in the ASEAN region, Europe, America,... Import-export activities are increasingly growing, leading to payment forms also expanding to meet customer requirements. In this article, MRS Steel will introduce the TT payment that importers can use when paying for orders in Vietnam.
1. What is TT payment?
Telegraphic Transfer (TT) is a form of international payment in which the bank will transfer money to the beneficiary (exporting party) in the form of Swift/telex telegraphic transfer based on the request of the payer (importing party). There are 3 forms of T/T payment as follows:
TT in advance: The buyer (importer) pays part or all of the order to the seller (exporter) before receiving the goods.
TT in sight: The buyer pays the seller for the order immediately upon receiving the goods and all necessary documents.
TT at X day: The buyer pays the order after a period of time after receiving the goods and documents.
2. T/T payment process when transacting at MRS Steel
TT payment activities have many unique characteristics and regulations. Below are the steps to make TT payments when purchasing goods at MRS Steel:
Step 1: Ship goods and documents
First, MRS Steel will pack the goods, deliver the goods and all necessary documents to the importer. Documents and order information will be carefully checked to avoid errors.
Step 2: Request the bank to transfer money
After the goods and documents have been sent, the importer writes a money transfer order and sends documents along with the documents to the bank and requests money transfer to MRS Steel. At this time, customers can choose the prepaid or postpaid money transfer method:
- In case of prepaid money transfer, it is necessary to prepare the following documents: money transfer order, foreign trade contract, foreign currency purchase contract (if the business's foreign currency account is insufficient, the importer needs to buy foreign currency for payment). When receiving the goods, the importer needs to supplement the bank with customs declarations, bills of lading, and commercial invoices.
- In case of postpaid money transfer, the importer needs to prepare documents including: money transfer order, foreign trade contract, foreign currency purchase contract (if any), customs declaration, bill of lading, commercial goods.
Step 3: The bank notifies the importer
After the bank has received all necessary documents from the importer, they will deduct money to MRS Steel and send a debt letter to this party.
Step 4: Transfer money
The agent bank transfers the payment and reports to the exporter.
3. Important notes to avoid risks when paying TT
Understand the role of banks
The bank is simply the party receiving and transferring money at the request of the buyer and seller, so it is not responsible for supervising, urging and monitoring the payment process nor holding the import-export documents. Therefore, the importer must carefully research the reputation of the seller because if any risks or fraud occur, the bank will not be responsible.
Risk management for full prepayment
The risk will lie with the buyer because they have to pay TT in advance while not knowing the condition of the goods. The seller may receive money but not deliver the goods, deliver late or have poor quality goods. Therefore, importers should only pay TT in advance of 40% of the order value and pay the rest in other forms as agreed. If the order value is small or the partner transacts many times, you can still pay 100% TT in advance. MRS Steel's sales contract specifically stipulated terms related to handling policies in case of defective delivery, not on schedule or missing goods, so 100% of international customers always feel secure when transacting TT.
Risk management for postpaid payment
When customers choose to pay postpaid, the seller may bear risks such as late payment, non-payment, non-receipt of goods,... Therefore, to ensure transaction safety, both parties can be applied the following methods:
40% prepayment and and 60% paid after 15 days from the date of receipt of goods, draft issued by a reputable bank from the importer
30% prepayment, the remaining 70% using the form of L/C at sight, irrevocable
30% prepayment, 30% L/C irrevocable immediately and 40% paid after 30 days from receipt of goods
Above are some popular forms of payment when importing steel that you can refer to. MRS Steel always tries to create the most favorable conditions for importers, so if there is any problem, you can contact MRS Steel via Email: firstname.lastname@example.org for the most thoughtful discussion and advice.