2026-09-21 · KeXinMaterials Editorial Team
B2B Payment Terms: T/T, L/C, O/A, D/P for Protective Case Procurement 2026
International B2B protective case procurement uses 4 main payment methods: T/T wire transfer, L/C letter of credit, O/A open account, D/P documents against payment. Each has different risk + cost + speed tradeoff. Below is the 2026 buyer guide.
T/T Wire Transfer (Telegraphic Transfer)
T/T is the most common B2B payment method for China factory procurement. Direct bank-to-bank wire transfer in USD or EUR.
T/T definition: Direct bank wire transfer from buyer's bank to seller's bank. Most common B2B payment for China imports.
T/T in advance (30% deposit + 70% balance): Standard for new buyers. 30% deposit before production, 70% before shipment. Low risk for seller, high cost for buyer.
T/T after production (100% before delivery): After production complete but before shipment. Buyer can inspect goods at factory before paying balance.
T/T after shipment (O/A + T/T): 30% deposit + 70% paid 30-90 days after B/L date. Open account terms. Higher risk for seller.
Wire fee: USD 25-50 per wire (buyer side) + USD 10-30 (seller side, sometimes waived for large amounts).
Processing time: 2-5 business days. Faster for SWIFT priority.
B2B recommendation: First 3 orders = 30% deposit + 70% before shipment (T/T). Established relationship = T/T 30/70 against B/L copy.
L/C Letter of Credit
L/C is the most secure payment method for large B2B orders. Bank-guaranteed payment upon document presentation.
L/C definition: Bank-guaranteed payment instrument. Buyer's bank promises to pay seller upon presentation of compliant shipping documents.
Irrevocable L/C: Cannot be cancelled or modified without consent of all parties. Standard for B2B.
Confirmed L/C: A second bank (usually seller's bank) adds its guarantee. Used when buyer's bank is in risky country.
L/C at sight: Payment upon document presentation. Seller gets paid immediately after document compliance.
L/C usance (deferred): Payment 30/60/90/180 days after B/L date. Seller provides financing to buyer.
L/C fees: USD 100-500 issuing fee + USD 200-1,000 advising fee + USD 0.10-0.50 per document on / discrepancy fees. Total cost USD 500-2,000 per L/C.
Document discrepancy: 30-60% of L/Cs have first-time discrepancy. Re-presentation delays payment 7-14 days.
B2B recommendation: For orders > USD 50,000 with new buyer, use irrevocable L/C at sight. Avoid usance L/C unless established relationship.
O/A Open Account
O/A is the most buyer-friendly payment method. Buyer receives goods before paying. High risk for seller.
O/A definition: Buyer pays 30-120 days after B/L date (after goods received). No documents or banks involved.
O/A 30 days: Pay 30 days after B/L date. Common for small orders with established buyers.
O/A 60 days: Pay 60 days after B/L date. Common for medium orders.
O/A 90 days: Pay 90 days after B/L date. Common for large orders in same-industry relationships.
O/A 120 days: Pay 120 days after B/L date. Used for very large orders with credit insurance.
Risk for seller: Highest. Buyer may default, dispute quality, or delay payment. No bank guarantee.
Risk mitigation: Credit insurance (Euler Hermes, Coface) covers 80-90% of O/A default. Cost 0.5-2% of invoice value.
B2B recommendation: O/A only for established buyers with 3+ years payment history. Require credit insurance for orders > USD 100,000.
D/P Documents Against Payment
D/P is a documentary collection method. Seller's bank releases shipping documents to buyer upon payment.
D/P at sight (D/P sight): Buyer pays upon document presentation. Bank releases B/L upon payment. Buyer then picks up goods.
D/P usance (D/P 30/60/90): Buyer pays 30/60/90 days after document acceptance. Bank releases documents upon acceptance.
D/P difference from L/C: No bank guarantee. Just a collection mechanism. Lower cost (USD 100-300) but higher risk.
D/P advantage: Buyer has goods, but cannot retrieve them without paying bank. Effective pressure.
D/P disadvantage: If buyer refuses to accept documents, seller must arrange return shipment. Risk of stranded goods.
D/P 30 days common for: Medium-size orders (USD 20,000-100,000) with semi-established buyers.
B2B recommendation: D/P 30 days is a good middle ground between T/T advance and O/A. Buyer gets short credit, seller has some control.
Payment Method Comparison
Comparison of T/T, L/C, O/A, D/P across risk + cost + speed + complexity dimensions.
T/T advance (30/70): Risk for buyer = HIGH (full deposit). Risk for seller = LOW. Cost = LOW (wire fee). Speed = FAST (no doc review). Complexity = LOW.
T/T against B/L copy (30/70): Risk for buyer = MEDIUM (deposit at risk). Risk for seller = MEDIUM (depends on B/L fraud). Cost LOW. Speed FAST.
L/C at sight: Risk buyer = LOW. Risk seller = LOW (bank-guaranteed). Cost = HIGH (USD 500-2,000). Speed = MEDIUM (2-3 weeks for doc review). Doc complexity HIGH.
L/C usance: Risk buyer = LOW. Risk seller = MEDIUM (bank pays but deferred). Cost HIGH. Speed = SLOW (usance period 30-180 days).
O/A 30 days: Risk buyer = LOWEST. Risk seller = HIGH. Cost LOW. Speed FAST (delivery + 30 days).
O/A 60-90 days: Risk buyer = LOWEST. Risk seller = VERY HIGH. Cost LOW (plus credit insurance). Speed SLOW.
D/P at sight: Risk buyer = MEDIUM. Risk seller = MEDIUM. Cost LOW (USD 100-300). Speed MEDIUM.
D/P 30: Risk buyer = LOW. Risk seller = MEDIUM-HIGH. Cost LOW. Speed MEDIUM-SLOW.
B2B recommendation by order size: < USD 10,000 = T/T 100% advance. USD 10,000-50,000 = T/T 30/70. USD 50,000-200,000 = L/C at sight. USD 200,000+ = L/C at sight + credit insurance.
Currency + FX Risk
International B2B payment uses USD, EUR, GBP, or RMB. FX risk + hedging strategies for buyer and seller.
USD: Most common B2B currency. Stable, widely accepted. Default for China factory exports.
EUR: Common for European buyers. May have lower FX volatility vs USD sometimes.
GBP: Used for UK buyers. Subject to Brexit-related FX volatility.
RMB (CNY): Increasing for China domestic sales + some Belt-and-Road exports.
FX risk for buyer: Currency may appreciate during production/shipping period (30-90 days). 1% appreciation = USD 500 on USD 50,000 order.
FX risk for seller: Currency may depreciate. Many China factories prefer USD for stability.
FX hedging: Forward contract locks rate. Cost 0.1-0.5% of notional. Eliminates FX risk for production period.
B2B recommendation: USD for most B2B orders. EUR for European buyers. Forward contract for orders > USD 100,000.
B2B Payment Workflow Example
Step-by-step workflow for a USD 50,000 protective case order with T/T 30% deposit + 70% against B/L copy.
Day 0: Buyer + seller sign CN + payment terms T/T 30/70. Buyer issues PO.
Day 1: Seller issues proforma invoice (PI). Buyer confirms PI.
Day 2-3: Buyer wires 30% deposit (USD 15,000) to seller's bank. Wire fee USD 25-50.
Day 3-5: Seller receives deposit. Production begins. Production time 30-45 days.
Day 35-45: Production complete. Pre-shipment inspection (PSI).
Day 45: Seller loads container, gets B/L from shipping line.
Day 46: Seller sends B/L copy + commercial invoice + packing list to buyer via email.
Day 46-48: Buyer reviews B/L copy. Wires 70% balance (USD 35,000) to seller.
Day 48-50: Seller receives balance. Seller sends original B/L + telex release to buyer.
Day 50-90: Goods in transit (varies by destination).
Day 50+: Buyer uses B/L to claim goods at destination port.
Total cycle: 90-140 days from PO to goods receipt.
B2B recommendation: For first-time buyers, use T/T 100% advance OR T/T 50/50 to minimize both party risks.
Payment Disputes + Resolution
Common payment disputes in B2B protective case procurement and resolution strategies.
Quality dispute: Buyer claims goods quality issue. Withholds payment. Resolution: third-party inspection, negotiation, partial refund.
Quantity dispute: Buyer claims shortage. Withholds payment. Resolution: B/L quantity + container tally report.
Late delivery dispute: Buyer claims late delivery, requests discount. Resolution: B/L date + contract terms.
Currency dispute: FX moves significantly during order. One party requests adjustment. Resolution: forward contract or split difference.
Document discrepancy: L/C documents have issue. Bank rejects. Resolution: re-present corrected documents (7-14 day delay).
Bank fraud: L/C issuing bank fails. Resolution: confirmed L/C with reputable advising bank. Use SWIFT MT700.
Payment default: Buyer refuses to pay O/A balance. Resolution: credit insurance claim (80-90% coverage), legal action.
B2B recommendation: Always include dispute resolution clause in CN (e.g., Singapore arbitration, ICC arbitration). Specify inspection standards (AQL S-1 / S-2 / S-3 / S-4).
Key Takeaways
- T/T 30/70 (deposit + balance before shipment): standard for new buyers, low seller risk
- T/T 100% advance: required for first-time small orders (USD < 10,000)
- L/C at sight irrevocable: for orders > USD 50,000 with new buyer, bank-guaranteed
- O/A 30-90 days: buyer-friendly, requires credit insurance for orders > USD 100,000
- D/P at sight / 30 days: middle ground for medium orders USD 20,000-100,000
- USD preferred for FX stability. Forward contract for orders > USD 100,000
- Dispute resolution: include arbitration clause (Singapore/ICC), specify AQL standard
- Total cycle: 90-140 days from PO to goods receipt for typical T/T 30/70 + ocean
FAQ
What is T/T payment in B2B procurement?
T/T (Telegraphic Transfer) is a direct bank-to-bank wire transfer, most common B2B payment method for China factory imports. Standard terms: 30% deposit before production + 70% balance before shipment. Wire fee USD 25-50. Processing 2-5 business days. Low cost, simple, but buyer carries deposit risk.
What is the difference between T/T and L/C?
T/T: Direct bank wire from buyer to seller. No bank guarantee. Risk depends on contract terms. Cost USD 25-50 wire fee. Fast 2-5 days. L/C: Bank-guaranteed payment instrument. Buyer bank promises to pay seller upon document presentation. Cost USD 500-2,000 (issuing + advising + discrepancy fees). Slower 2-3 weeks for doc review. L/C safer but more expensive.
What is O/A in B2B payment terms?
O/A (Open Account) means buyer pays 30-120 days AFTER receiving goods (after B/L date). Most buyer-friendly. Highest risk for seller. Common payment terms: O/A 30 days (small orders), O/A 60 days (medium), O/A 90 days (large), O/A 120 days (with credit insurance). Seller should require credit insurance (Euler Hermes, Coface) for orders > USD 100,000.
What is D/P documents against payment?
D/P (Documents Against Payment) is a documentary collection method where seller's bank releases shipping documents (B/L) to buyer upon payment. D/P at sight: pay immediately. D/P usance: pay 30/60/90 days after acceptance. Lower cost than L/C (USD 100-300) but no bank guarantee. Middle ground between T/T advance and O/A.
What is L/C discrepancy?
L/C discrepancy is when shipping documents (B/L, invoice, packing list, certificate of origin) do not match L/C terms exactly. Common discrepancies: spelling errors in name, date mismatch, quantity mismatch, missing document. 30-60% of L/Cs have first-time discrepancy. Resolution: corrected re-presentation (7-14 day delay) or amendment (USD 50-200 fee).
How does credit insurance work for O/A?
Credit insurance protects seller against buyer non-payment for O/A credit companies: Euler Hermes (Germany, now Allianz Trade), Coface (France), Atradius (Netherlands), China Export & Credit Insurance Corporation (SINOSURE, China state-owned). Coverage 80-90% of invoice value. Cost 0.5-2% of invoice. Premium based on buyer credit rating + country risk + payment terms.
What is the best payment method for first-time Chinese supplier?
For first-time Chinese supplier: (1) < USD 10,000 = T/T 100% advance (safest). (2) USD 10,000-50,000 = T/T 30% deposit + 70% before shipment. (3) USD 50,000-200,000 = L/C at sight irrevocable. (4) > USD 200,000 = L/C at sight confirmed + credit insurance. Avoid O/A with first-time supplier.
What is the cost of L/C?
L/C cost: USD 100-500 issuing fee (buyer's bank) + USD 200-1,000 advising fee (seller's bank) + USD 0.10-0.50 per document on fees + USD 50-200 amendment fee + USD 100-300 discrepancy fee if documents have issue. Total L/C cost: USD 500-2,000 per transaction. Swift MT700 message: USD 50-150. Confirmed L/C: additional USD 200-500 confirming fee.