TT, LC, escrow, deposits and Incoterms — and how to structure payment safely.
Most China orders are paid by bank transfer (TT) with a deposit up front and the balance before shipment — commonly 30% / 70%. Reduce risk by paying only a company account matching the license, releasing the balance after a pre-shipment inspection, and using escrow or a Letter of Credit for larger orders. Never pay a personal account.
| Method | How it works | Buyer risk |
|---|---|---|
| TT (bank transfer) | Deposit then balance to a company account | Medium — pay only a verified company account |
| Letter of Credit (LC) | Bank pays against shipping documents | Lower — good for large orders |
| Escrow / Trade Assurance | Third party holds funds until you confirm | Lower — on qualifying platform orders |
| Personal account / crypto | Direct to an individual | High — no recourse; avoid |
The common terms are a 30% deposit to start production and the 70% balance before the goods ship. The strongest position is to tie that balance to a pre-shipment inspection — you release it only once the goods are confirmed to match the spec. For repeat, trusted suppliers, terms sometimes loosen; for a first order, keep the deposit modest and the balance conditional.
The Incoterm decides who pays and who is responsible at each stage, so it changes the real landed cost of a quote — always compare quotes on the same Incoterm.