Indonesian Coffee Payment Terms: LC vs TT (2025 Guide)

A practical, decision-stage guide to structuring safe TT terms for Indonesian coffee in 2025, when an LC is worth it, what documents to require before balance, and the red flags to avoid on your first order.

If you’re staring at a proforma invoice wondering whether to pay TT or push for an LC, you’re not alone. We’ve helped hundreds of buyers structure their first Indonesian coffee orders safely without overpaying on bank fees. Here’s the exact framework we recommend in 2025.

The quick answer: LC vs TT in one minute

First orders under USD 60–80k. A well-structured TT with milestone triggers and inspection is usually the best cost‑risk balance.
First orders above USD 80–100k, or if you can’t verify the supplier fast. LC at sight is worth a serious look, especially if your bank gives you favorable LC pricing.
Repeat orders with proven performance. TT with lower deposits or even CAD/DP can work, as long as specs and timelines are clear.

What about DA? Documents against Acceptance pushes significant risk to the seller and is rarely accepted for first‑time Indonesian coffee shipments.

Takeaway. If you’re new to the supplier and below USD 80k, structure a safe TT. If you’re over that threshold or can’t verify the counterparty, consider LC at sight.

The three pillars of a safe TT (what actually works)

In our experience, three things protect a TT better than long contracts do:

Clear, measurable specs. Agree on SCA cup score range, screen sizes, moisture (≤12.5–13%), defects and processing. Put it directly on the PI. For example: “Sumatra Mandheling G1, moisture 11.5–12.5%, screen 17/18, max 8 full defects per 300 g, SCA 83–84.”
Milestones tied to proof. Don’t release the balance on a promise to ship “next week.” Tie it to documents, independent QC, and container sealing evidence.
Independent eyes. A third‑party inspection or lab report is the cheapest insurance you’ll buy on a TT. Even for 1–3 pallets.

Is a 30/70 TT split standard for Indonesian coffee orders?

Yes. For first orders, 30/70 TT is common. We also see 20/80 if the buyer’s references check out, and 40/60 for tight lead times or limited microlots. For repeat orders, 0/100 against documents is possible with trusted partners, but expect 10–20% deposits to remain typical in 2025.

What should trigger your TT balance? Documents and inspection

Before releasing the TT balance, request all of the following as scanned copies at minimum:

Commercial invoice and packing list
Bill of Lading (or forwarder’s draft B/L before vessel cut‑off) with container and seal numbers
Certificate of Origin (Chamber, REX statement where applicable)
Phytosanitary certificate (plant quarantine)
ICO Certificate of Origin (for shipments requiring ICO documentation)
Quality pack: moisture/defect report, screen size analysis, and cupping notes (SCA format)
Weight note and container stuffing photos showing lot tags and the final high‑security seal
Fumigation certificate if required by your market or blend components

That bundle, plus an inspection certificate when used, is a solid basis for balance release.

Can I use third‑party inspection to trigger the TT balance?

You should. It’s the cleanest trigger for first orders.

Who operates in Indonesia. SGS, Cotecna, Intertek, Bureau Veritas, and Sucofindo all cover coffee. Lead time is typically 2–4 business days from booking to report if samples are ready and the warehouse is accessible.

Costs in 2025. Budget USD 300–800 for visual QC, weight checking and sampling. Add USD 150–350 if you want lab moisture and defects quantified in detail. Remote areas can add travel fees. It’s still far cheaper than an LC for sub‑USD 80k orders.

Practical tip. Ask your exporter to pre‑bag and tag by lot, and to provide a tentative stuffing schedule. That keeps the inspector from waiting around and cuts your bill.

At what order value does an LC make more sense?

We recommend LC at sight when any of these apply:

Order value is above USD 80–100k, or you’re loading multiple origins/grades into one FCL with tight delivery windows.
You can’t establish supplier credibility quickly and your internal risk policy requires bank instruments.
You need bank financing terms linked to the LC or supplier credit that depends on confirmed LC.
Your end customer demands LC‑based compliance.

If you’re under USD 80k, a safe TT usually wins on cost and speed. LC workflows can delay booking and are rigid if specs change last minute.

TT bank fees vs LC costs in 2025

Here’s what we’re seeing across major banks this year:

TT (bank transfer) typical costs

Outgoing wire fee. USD 15–60.
Intermediary bank charges. USD 10–35 deducted en route for USD wires.
FX margin. 0.20–1.00% over mid-market if you’re converting.
Compliance holds. Slightly more frequent in 2025, so send PI/contract and KYC details with the wire to avoid delays.

LC at sight typical costs

Issuance fee. 0.20–0.50% per month of LC validity, often charged per quarter or flat minimum.
Advising/negotiation. USD 150–350 per presentation.
Confirmation (if requested). 0.30–1.50% depending on bank risk appetite.
Amendment/discrepancy fees. USD 75–150 each.
SWIFT/handling. USD 25–100 per message.

Net effect. For a USD 60k order, TT often costs USD 50–250 total. A comparable LC can run USD 600–1,800 before confirmation. For USD 150k+, LC fees are easier to justify.

Common red flags in proforma invoice payment terms

We decline or renegotiate when we see these on a first order:

100% TT before production for a new relationship.
Beneficiary account name doesn’t match the legal company on the PI.
No specs on moisture, screen size, defects, or cup profile. Or vague language like “premium arabica.”
No document list tied to balance payment.
Refusal of third‑party inspection or pre‑shipment sample.
Unrealistic lead times during peak harvest or Ramadan when port staffing changes.
Request to pay to a personal e‑wallet or non‑bank channel.
Missing exporter identifiers (NIB, tax number) or unwillingness to share references from recent shipments.

If you’re unsure about a PI, share it with a seasoned buyer or your bank’s trade team before sending any deposit.

How can a small roaster verify a new Indonesian supplier before a TT deposit?

Here’s a lightweight checklist that works:

Ask for company legal details. NIB (business ID), tax number, and bank letter confirming their account name and SWIFT.
Request two trade references from the past 12 months. Importers or forwarders you can call.
Review recent shipping proofs. Masked B/L copies and phytosanitary certs from the last quarter.
Evaluate samples and QC. Pre‑shipment or current‑crop samples with lab moisture and defects.
Video walkthrough. Quick warehouse call showing your bags, lot tags and moisture readings.
Check Google Maps and website consistency. Compare addresses on the PI, website and legal docs.

Three out of five buyers we work with reduce their deposit from 30% to 20% after completing this checklist.

Sample TT milestones you can copy (FOB Indonesia)

Option A: Straightforward 30/70 for a first order up to USD 80k

30% TT deposit on signed PI and booking confirmation.
40% TT after third‑party inspection report and release of scanned CI/PL and stuffing photos.
30% TT against scanned B/L, COO, phytosanitary and quality pack. Originals couriered after full balance.

Option B: Inspection‑anchored 20/80 for verified suppliers

20% TT deposit on PI.
60% TT after inspection certificate and draft B/L issued.
20% TT against final B/L and document set.

CIF/CFR variation. If the seller handles freight, add the insurance certificate (CIF) and final freight invoice to the document list.

Need help tailoring milestones to your project size or origin mix? You can Contact us on whatsapp and we’ll suggest a structure that fits your bank and timeline.

Real‑world scenarios and what we recommend

Small roaster buying 1–3 pallets mixed origin

Use TT with inspection. 20–30% deposit, balance tied to inspection + draft B/L + quality pack.
Keep your SKU list tight. For example, a pallet split across Arabica Bali Kintamani Grade 1 Green Coffee Beans and Blue Batak Green Coffee Beans is easier to QC than five microlots.

Importer booking 1 FCL mixed Sumatra lots

If you’re above USD 100k and new to the supplier, consider LC at sight. Otherwise use 20/80 TT with SGS and strict specs. For body‑forward blends, we often see FCLs built around Sumatra Mandheling Green Coffee Beans with a Robusta component like Robusta Lampung Green Coffee Beans (ELB & Grades 2–4).

Specialty micro‑roaster trialing fermentation profiles

TT with small deposit and heavy document triggers is fine. Limit your risk by starting with 300–600 kg of a fermentation lot such as Bali, Java, Gayo & Mandheling - Wine Green Arabica Coffee Beans.

Aged or low‑acidity components

Specs matter more than ever. For Musty Cup Green Coffee Beans (Aged Arabica), define age window, moisture range and flavor notes clearly on the PI, and always tie balance to a cupping report.

Final takeaways you can use today

Under USD 80k, a safe TT structure with inspection beats LC on cost and speed.
A 30/70 TT split is normal for first orders. Push to 20/80 once you verify the supplier.
Balance release should follow documents and independent QC, not promises.
Budget USD 300–800 for inspection. It’s the best risk control per dollar.
Move to LC at sight when order values or customer requirements justify the added cost and rigidity.

If you’re mapping a purchase plan right now, browse current availability and typical specs across Indonesian origins here: View our products. And if your bank is pushing one way while your gut says the other, Call us for a quick sense‑check from a team that ships Indonesian coffee every week.