When you import coffee from Indonesia, the two payment methods you will be offered are almost always LC (Letter of Credit) and TT (Telegraphic Transfer). This guide explains the LC vs TT coffee import payment choice in plain terms: how each one works, what it costs, who carries the risk, and which method makes sense depending on your order size and how well you know your supplier. As a green coffee exporter shipping FOB Belawan, Indonesia Specialty Coffee (ISC) handles both every week, so the guidance here reflects how these payments actually settle, not just banking theory.
Last updated: July 2026
What LC and TT Mean in Coffee Importing
A Telegraphic Transfer (TT) is a direct bank-to-bank wire sent through the international SWIFT network. Your bank moves money straight into the exporter’s account. It is the same mechanism as any international wire, just the trade term for it.
A Letter of Credit (LC) is a payment guarantee from your bank. Your bank promises to pay the exporter, but only after the exporter presents a specific set of shipping documents that prove the coffee was shipped exactly as agreed. The bank sits in the middle and checks the paperwork before any money is released.
The short version: TT runs on trust between you and your supplier, while LC replaces trust with a bank-checked document process. Here is how they compare at a glance.
| Feature | TT (Telegraphic Transfer) | LC (Letter of Credit) |
|---|---|---|
| What it is | Direct bank wire | Bank payment guarantee |
| Speed to set up | Fast (same day to a few days) | Slow (adds 1 to 3 weeks) |
| Cost | Low, flat fee | Higher, a percentage of order value |
| Who checks the deal | You do | Your bank checks documents |
| Best for | Trusted suppliers, smaller orders | New suppliers, large orders |
Telegraphic Transfer (TT): How It Works, Costs, and Risks
A Telegraphic Transfer is the simpler of the two methods and the one most coffee buyers use once a supplier relationship is in place. You send the funds from your bank to the exporter’s bank, and the coffee is prepared and shipped against that payment.
TT is cheap and quick. A single international wire usually costs between $20 and $50 in bank fees, and the money typically arrives in 2 to 5 business days. There is very little paperwork, which is why most repeat green coffee orders settle this way.
Most exporters, including ISC, do not ask for the full amount upfront on a TT. The common structure is a deposit plus balance: you pay a percentage when you confirm the order, and the remainder before or on shipment. This split protects both sides and keeps everyone committed. [confirm ISC’s current deposit and balance percentages before publishing]
The trade-off is risk. On a TT, once your money reaches the supplier’s account, it is in their hands. If the coffee is late, off-spec, or never ships, your bank cannot claw the payment back. Your protection comes entirely from choosing a supplier you trust and from the balance-on-shipment structure, not from the payment method itself.
Buying from ISC for the first time? You can request our wholesale pricelist and start with a sample order before committing to full payment terms.
Letter of Credit (LC): How It Works, Costs, and Protection
A Letter of Credit replaces personal trust with a bank-controlled process, which is why buyers reach for it on large orders or with a supplier they have never worked with. Your bank issues the LC to the exporter’s bank and guarantees payment, but attaches conditions.
The exporter only gets paid after presenting the exact documents the LC demands: bill of lading, commercial invoice, packing list, certificate of origin, and often a phytosanitary or weight certificate. If a single document does not match the LC wording, the bank can refuse to release funds until it is corrected. This document discipline is the real protection an LC gives you.
That protection costs more. LC fees usually run 0.5% to 1.5% of the total order value, and both banks add charges for issuing, amending, and confirming the credit. On a $30,000 coffee order, that can mean several hundred dollars in fees, far more than a TT wire. An LC also takes time. Coordinating your bank, the exporter, and the exporter’s bank commonly adds 10 to 20 days before shipment can move.
An irrevocable LC at sight is the version most used in the green coffee trade. Irrevocable means neither side can change or cancel it without agreement, and “at sight” means the exporter is paid as soon as compliant documents are presented. For a first large container order, that structure gives both the buyer and the exporter confidence that the deal will be completed as written.
LC vs TT Side by Side
The right choice depends on how much you are spending and how well you know the exporter. This table sums up the practical differences for a coffee buyer.
| Factor | TT | LC |
|---|---|---|
| Setup cost | $20 to $50 per wire | 0.5% to 1.5% of order value |
| Time to arrange | 2 to 5 days | 10 to 20 extra days |
| Paperwork | Minimal | Heavy, document-driven |
| Buyer protection | Low, based on trust | High, bank-verified documents |
| Best order size | Samples to mid-size orders | Large orders and full containers |
| Best relationship | Established supplier | New or unverified supplier |
Which Should You Choose When Buying from ISC?
For most buyers sourcing green coffee from Indonesia Specialty Coffee, a TT with a deposit and balance split is the practical choice. Sample orders (from 1 kg), microlots (60 kg), and standard wholesale orders (350 kg) are small enough that the cost and delay of an LC rarely make sense. You save the bank fees and the coffee ships faster.
An LC becomes worth considering on container-load orders of 9 MT and above, where the invoice value is high enough that the extra protection justifies the extra cost. It is also a reasonable request if this is your first order and you want a bank-verified process while trust is still being built.
A middle path many roasters use: place a smaller TT-based sample or microlot order first, confirm the coffee cups as described and arrives clean, then scale up to container volumes on TT once the relationship is proven. That approach gives you LC-level confidence without LC-level cost. Whichever method you choose, agree the payment terms in writing before shipment, and make sure they line up with your Incoterms for coffee trade and the correct HS code for your coffee.
Frequently Asked Questions
What is the difference between LC and TT payment?
A TT is a direct bank wire sent straight to the supplier, relying on trust between the two parties. An LC is a payment guarantee from your bank that only releases funds once the supplier presents correct shipping documents. TT is faster and cheaper; LC is safer for large or first-time orders.
Is LC or TT better for importing coffee from Indonesia?
TT is better for samples, microlots, and orders with a trusted supplier because it is cheap and fast. LC is better for large container orders or a first purchase from an unknown exporter, where bank-verified document checks are worth the higher cost. Most repeat coffee buyers use TT.
How much does an LC cost compared to a TT?
A TT wire costs roughly $20 to $50 in bank fees per transfer. An LC costs far more, usually 0.5% to 1.5% of the total order value, plus separate issuing, amendment, and confirmation charges from both banks. On a $30,000 order, that gap can be several hundred dollars.
Is TT payment safe when buying green coffee?
TT is safe when you use a trusted, verified supplier and a deposit-plus-balance structure rather than paying 100% upfront. The risk with TT is that funds cannot be recovered once sent, so your protection comes from the supplier’s reputation and paying the balance on shipment, not from the wire itself.
What documents does an LC require for a coffee shipment?
An LC for coffee typically requires a bill of lading, commercial invoice, packing list, and certificate of origin, and often a phytosanitary certificate and weight certificate. The exporter is only paid once these documents exactly match the LC terms, so accuracy on every document is essential.
Order Green Coffee from Indonesia Specialty Coffee
Indonesia Specialty Coffee is a direct exporter of Grade 1 specialty green coffee beans from across Indonesia, shipping FOB Belawan to roasters, importers, and distributors worldwide. We ship only 82+ SCA Grade 1 lots, all Halal certified, with Organic and Rainforest Alliance available on request.
We work with both TT and LC payments, matched to your order size: 1 kg samples, 60 kg microlots, 350 kg standard wholesale, and container loads from 9 MT with a custom per-MT quote. New buyers can start with a sample order before committing to larger volumes.
To confirm current payment terms and pricing, view our wholesale pricelist or contact our team for a custom quote and a payment structure that fits your order.
