Remittance methods can be divided into three types: mail transfer, telegraphic transfer and remittance by draft.
(1) Mail Transfer (M/T).
Mail Transfer refers to a remittance method in which the remitting bank, upon the request of the remitter, sends a letter of authorization for payment of a certain amount of money to the remitting bank, authorizing the remittance of a certain amount of money to the payee.
The advantage of mail transfer is that the cost is relatively low, but the payee will receive the remittance later.
(2) Telegraphic Transfer (T/T).
Telegraphic Transfer refers to a remittance method in which the remitting bank, upon the request of the remitter, sends a letter of authorization for payment of a certain amount of money to the remitting bank through telecommunication means such as telegram or telex, instructing the remittance of a certain amount of money to the payee.
The advantage of telegraphic transfer is that the payee can receive the remittance quickly, but the cost is slightly higher than that of mail transfer.
(3) Remittance by Banker’s Demand Draft (D/D).
A draft is a remittance method in which the remitting bank, upon the remitter’s application, opens a banker’s demand draft (Banker’s Demand Draft) on behalf of the remitter, with its branch or agent acting as the paying bank, to pay a certain amount of money to the payee.
The difference between a draft and a telegraphic transfer or mail transfer is that the remitting bank of a draft does not need to notify the payee to withdraw the money, but the payee can go to the bank with the draft to withdraw the money. In addition to the provisions restricting transfer and circulation, this type of draft can be transferred and circulated after the payee endorses it, while the payee of a telegraphic transfer or mail transfer cannot transfer the right to collect the money.