Remittance, also known as remittance, refers to the payment method in which the overseas buyer actively remits the payment to the seller through the bank.
The methods of remittance include telegraphic transfer (T/T), mail transfer (M/T), and bill transfer (D/D). Only telegraphic transfer is the commonly used method.
1) Telegraphic transfer business process
The telegraphic transfer business process is as follows:
①The remitter (buyer) submits a remittance application to the local bank and pays the money.
②After the overseas bank (remitting bank) agrees, the remitter obtains the telegraphic transfer receipt.
③The remitting bank sends a telegram or telex with a security deposit to the seller’s bank (receiving bank), entrusting the receiving bank to pay the remittance to the beneficiary (seller).
④After receiving the telegram or telex, the receiving bank verifies that the seal is correct, prepares a telegraphic transfer notice, and notifies the beneficiary to collect the money.
⑤After receiving the notice, the beneficiary stamps the receipt and returns it to the remitting bank.
⑥ The remitting bank debits the remitting bank’s account and credits the beneficiary’s account to pay the beneficiary.
⑦ The remitting bank sends the paid debit notice to the remitting bank to inform it that the remittance has been paid.
2) Features of telegraphic transfer business
Under the telegraphic transfer method, if the payment is made before delivery (T/T In Advance), whether the seller delivers the goods according to the contract after the buyer remits the payment depends entirely on the seller’s credit; if the payment is made after delivery (T/T After Arrival), whether the buyer pays the payment according to the contract after the seller delivers the goods also depends on the buyer’s credit. Banks do not guarantee the payment of the payment in the remittance business, so the remittance method is a kind of commercial credit.