T · 2
Telegraphic transfer (T/T, wire transfer) T/T
Payment sent directly to the seller’s account through the interbank SWIFT network. In raw material trade it is used in patterns such as “30 % T/T in advance, 70 % T/T against copy of bill of lading”. It is fast and cheap but carries no bank guarantee: with advance payment the buyer bears the risk, with payment after shipment the seller does. Confirming the IBAN and beneficiary name through a known channel before paying is the key protection against “our bank account has changed” e-mails.
Trade credit insurance
Insurance of the seller’s receivables from credit sales against the buyer’s insolvency or protracted default (commercial risk) and against political risks such as war or transfer bans. The insurer sets a credit limit for each buyer and, after a loss, usually pays 85–95 % of the debt. Providers include export credit agencies such as Türk Eximbank and private insurers such as Allianz Trade, Coface and Atradius. A policy also makes bank financing easier and cheaper.