What Is a T/T (Telegraphic Transfer) Payment?

A T/T (telegraphic transfer) is a bank wire payment method used to pay overseas apparel factories, typically split between a deposit before production and a balance before shipment. It remains the default payment structure for most direct to consumer brands working with factories in China, Vietnam, Bangladesh, and other major manufacturing regions.

How T/T Payments Work in Practice

When you place a production order with a factory, you send funds directly from your business bank account to the factory's account via SWIFT network. The factory provides banking details on their proforma invoice. Your bank converts currency, deducts fees (usually $25 to $50 per transaction), and the funds arrive in 2 to 5 business days depending on correspondent bank routing. The factory confirms receipt, and production scheduling begins. Most factories will not cut fabric until the deposit clears.

Standard T/T Split Terms

The most common structure is 30/70: 30% deposit to start production, 70% balance due before shipment. Factories with tighter margins or newer relationships may request 50/50. Established brands with strong payment history sometimes negotiate 20/80 or even 0/100 with net terms. The split reflects risk allocation. Factories use deposits to purchase raw materials and secure production slots. Balance timing matters. Most factories require payment against shipping documents or before container loading.

Why T/T Dominates Apparel Transactions

T/T wins on simplicity and cost. A wire transfer costs $30 to $50 regardless of order size. Compare that to a letter of credit, which can run 1% to 3% of order value plus bank fees and document handling. For a $50,000 order, that difference is significant. T/T also moves faster. No document negotiation, no bank approval cycles. For brands running lean operations with trusted factory partners, the speed advantage compounds across multiple production cycles per year.

What Shows Up on a T/T Invoice

A proper T/T proforma invoice includes: beneficiary name (the factory's legal entity), bank name and address, SWIFT/BIC code, account number, and intermediary bank details if applicable. You will also see the invoice amount in USD or sometimes EUR, order reference number, and payment terms spelled out. Always verify the account matches previous invoices. Wire fraud targeting apparel transactions has increased. One wrong digit sends your deposit to a stranger's account with limited recovery options.

Common Mistakes Brands Make

Sending deposits before receiving a detailed tech pack sign off creates disputes. The factory builds what they understood, not what you imagined. Another mistake: paying the balance before completing a final AQL inspection. Once the money moves, your leverage disappears. Timing bank transfers around holidays causes problems too. Chinese New Year, Eid, and Diwali can delay factory banking operations by weeks. Schedule payments to clear well before production deadlines. Finally, ignoring exchange rate timing on large orders can cost thousands. A $100,000 balance paid when USD weakens 2% against CNY adds $2,000 to your landed cost.

T/T vs Letter of Credit: When to Choose

Use T/T for orders under $100,000 with factories you have shipped with before. The cost savings and speed outweigh the risk exposure. Switch to a letter of credit when order values climb above $150,000, when working with a new factory for the first time, or when the production timeline stretches beyond 90 days. Letters of credit also make sense for complex orders involving multiple shipments or performance milestones. Some brands use hybrid approaches: T/T for sample development, LC for bulk production.

How T/T Works in an Ohzehn Deal

Ohzehn's vetted factory network includes payment term verification during onboarding. When you request a quote through the 72 hour process, the response includes confirmed T/T terms that factory will honor. Ohzehn does not hold funds or act as payment intermediary. You pay the factory directly. This keeps costs low and maintains clear accountability. The vetting process does verify that factories have stable banking relationships and clean payment histories with other brands.

Protecting Yourself on Large T/T Transfers

For orders above $75,000, consider splitting production across two purchase orders with separate T/T cycles. This limits exposure if quality issues emerge mid run. Request shipping documents before releasing final balance: commercial invoice, packing list, and bill of lading draft. Some brands use escrow services for first orders, though this adds cost and complexity. Build payment milestones into your production calendar. A 30% deposit in week one, 40% after fabric inspection in week four, and 30% against final QC in week eight distributes risk across the production timeline.