Payment Terms with African Buyers: TT, L/C and Deposits for Chinese Suppliers

The safest payment terms with African buyers for a new customer are a deposit before production and the balance before the goods are released, usually by bank transfer (TT). For large orders or new buyers, a letter of credit can add more protection. Open account, where you ship first and get paid later, should wait until you know the buyer well.

This is general information, not financial or legal advice. Talk to your bank and your finance team before you sign terms.

Why payment terms matter more in Africa

Most losses in export trade come from payment problems, not from product problems. With African buyers there are two common causes. The first is fraud: fake buyers, fake purchase orders and fake payment slips. The second is delay: your buyer wants to pay, but cannot get US dollars from their bank quickly. Dollar supply and bank rules differ by country and change over time. We do not have verified numbers on how often this happens, so we will not give any. Just plan for it.

Your goal is simple: never ship goods you have not been paid for, unless you have made a clear, written decision to take that risk.

Telegraphic transfer TT: the standard choice

A telegraphic transfer (TT) is a bank-to-bank wire. It is the most common way Chinese suppliers get paid by African buyers. It is simple and fast when it works. The risk is in the timing: you must decide when the money must arrive and when the goods can move.

Two common patterns:

• Deposit and balance. The buyer pays a share first, and the rest before shipping or against a copy of the shipping papers.
• Full payment before shipment. Good for small orders and samples.

Always check that money has really arrived in your bank account. A screenshot of a transfer is not payment.

30% deposit 70% balance: how to use it

A 30% deposit 70% balance plan is a very common starting point for factory orders. It is a common pattern, not a rule. Choose the numbers using your costs. The deposit should cover your materials and set-up, so that if the buyer disappears you do not lose money.

Illustrative example with round numbers: an order is worth US$10,000. With a 30% deposit, the buyer pays US$3,000 before you start. You make the goods. Before the container leaves your control, the buyer pays the remaining US$7,000. If the buyer cancels after the deposit, you must decide what you can keep. Write the rules in the contract before you start.

For a custom product, such as a special size or private label, ask for a higher deposit. Nobody else can buy those goods if the buyer walks away.

Letter of credit Africa: when it helps

A letter of credit (L/C) is a bank promise to pay you if you show the exact papers the L/C asks for. It can be useful for large orders or when you do not know the buyer. It can protect both sides.

But it is not simple. A letter of credit in Africa depends on the issuing bank, and on the buyer's ability to open it. Your papers must match the L/C terms exactly. A small spelling error can cause the bank to refuse payment. Fees can be significant, so ask both banks about costs. Use an L/C when the order is large enough to justify the work, and ask your bank to check the draft L/C before you accept it.

Open account and long credit: be careful

Open account means you ship first and the buyer pays after a set number of days. It is how some long-term trade works, but it carries the highest risk. For a new African buyer, avoid it. If you offer it later to a trusted customer, start with small amounts and set a credit limit. If you want protection, ask your bank or a credit insurer about options. Our post on how to verify an African buyer shows what to check first.

Reduce African buyer payment risk

Whatever terms you pick, these habits reduce African buyer payment risk:

• Put terms on the proforma invoice and in the contract. Include currency, bank details, deadline and what happens if payment is late.
• Confirm your bank details by a second channel, such as a phone call to a known number. Payment fraud often changes bank details by email.
• Quote in US dollars, and keep price validity short.
• Do not release original shipping documents until payment terms are met.
• Match terms to the shipping terms. See FOB vs CIF quotes for how quoting and risk connect.
• Keep your warranty rules clear. Read about after-sales and spare parts.

For market-specific notes, see our Nigeria guide.

Trade assurance for suppliers

Some platforms offer protection tools for orders placed through them. Comilmart has a trade assurance page. See the page for how it works, because we do not describe details here. Use platform tools as an extra layer, not as a replacement for a clear contract.

Frequently asked questions

Is 30% deposit too low? It depends on your costs. If materials and set-up cost more than 30%, ask for more.

Should I accept payment in naira, cedi or shilling? Only if your finance team approves the exchange-rate risk. US dollars are simpler.

Can I ship before the balance arrives? Only by a deliberate decision. Many suppliers wait for the balance before releasing documents.

What if the buyer asks for 90 days credit? Say no for a first order. Offer it later after a good record.

Getting started

Write your standard payment terms on one page and use it for every quote. Ready to reach buyers? Apply as a supplier on Comilmart — there are no listing fees to get started.