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4 Important Payment Methods Used in Paying Your Chinese Suppliers

If you order goods for your e-commerce shop or business from the Chinese mainland, you will know how troublesome payment methods are to pay your Chinese supplier. Because the Chinese mainland has strict capital controls and has only been engaged in international trade for about two decades. Paying your suppliers in China is complex and expensive.

If you are a small and medium-sized or young company with suppliers in China and need to find the best payment methods, this article will give you a brief introduction to several payment methods and what you need to know.

Different Kinds of Payment Methods On The Globe
Different Kinds of Payment Methods On The Globe

First of all, you should know that there are usually two stages of payment to Chinese suppliers: The deposit is usually 30% of the full amount. This will be paid before producing to secure your order. The remaining 70% will be paid after the order is completed. It means that you usually have to pay twice for one order. Keep this in mind when considering which payment method is best for you (because the cost will increase! ).

Different Payment Methods Used By Importers


If you want to transfer money frequently to your Chinese suppliers, please consider using a wise business account among so many payment methods.

Compared with other payment methods, it is usually much easier to use Wise to make international payments. You can sign the contract, pay in the local currency, enter the supplier’s bank information, and your supplier will receive payment in US dollars or RMB.

Wise Bussiness is a kind of payment methods.
Wise: A Smart way of Payment Methods

Suppliers do not need to sign contracts anywhere. For them, it’s like depositing cash in their bank accounts. You and your suppliers can also reach the risk balance by combining wise payments with third-party escrow, local agents, or deposits.

Transfers are made at mid-market rate – the one you see on Google. This makes Wise very different from other forms of international payment.

The price of Wise is up to six times cheaper than other payment methods. If you have a Wise multi-currency account, you can deposit your money in different currencies and remit it to China when the time or interest rate is right.


In this mode of payment, the trusted third party holds the funds that the buyer agrees to pay to the supplier and transfers the funds to the seller only if certain predetermined criteria met-such as when the buyer receives the goods on time (as described in). Alibaba, a Chinese business-to-business platform, provides buyers and sellers with a service called “trade protection”, similar to escrow services. Alibaba said the guarantee added an extra layer of security for buyers dealing with Chinese suppliers. It undertakes a refund if:

Your shipment has been delayed, exceeding the promised date.

Your products do not meet the predetermined quality standards.

The process of Escrow working
The Process of Escrow Working

However, this method of payment is not very popular among Chinese suppliers.

Trusteeship protects both buyers and sellers. The buyer can avoid the fraud from the seller, who disappears when the seller receives the money without sending the goods. The seller is protected because if the goods are delivered as promised, they will be guaranteed payment by the buyer.

For buyers, the restriction of Alibaba’s trade guarantee is that you will be limited to the supplier on Alibaba. Even within the platform, you have to choose smaller baskets because not all suppliers on Alibaba have signed up for the service. After all, it charges them a 5 percent fee. In addition, you need to pay in full at the initial stage, so your funds may be occupied for some time.


It is the most direct way to pay Chinese suppliers. If you already have a commercial bank account, you don’t need to set up anything else to process this payment. In most cases, you can go directly to your bank branch (or through your bank’s electronic banking portal) and transfer money there. Generally speaking, telegraphic transfer is an easy business practice. Especially for smaller factories, this is their most familiar and favorite payment method.

T/T Is an Important Practice in Oversea Business.
T/T Is an Important Bank Practice in Oversea Business.

In general, when making a wire transfer, you should prepare the following information about your order:

  • The reference number on the invoice.
  • The payment amount on the invoice.
  • Order date.
  • The number of goods you order (for example, if you want to create a watch and order 1000 pieces, you must specify 1000).
  • Name of the company handling the goods.

However, this may not be an exhaustive list of the details you need to provide. Generally speaking, because the Chinese mainland strictly enforces capital controls, transferring money to the country requires a lot of information about why you traded in the first place.


PayPal is a popular payment method for buyers because it is much less risky, easy to use, and usually provides good protection for buyers. Although this is a popular option for buyers, it is not very popular among suppliers because of difficult withdrawals, high taxes, and potential refunds from dishonest buyers. PayPal is widely accepted by Aliexpress,, and other e-commerce sites or used for sample payment.

Because the PayPal payment fee is very high, it is not a widely accepted payment method in the industry. Many factories do not accept PayPal payments, mainly because of expensive costs, and it is difficult to withdraw money from PayPal in China.

 a popular and common payment method
A Popular and Common Payment Method

Yes, it does protect buyers in some way, but most factories that work with retail or e-commerce businesses use wire transfers and do not accept PayPal.

Of course, payment for samples in small batches (20-50 pieces) or occasional purchases on Aliexpress is an exception. It is fast, convenient, and protects buyers if samples or small orders do not arrive.

The most common method of payment accepted is telegraphic transfer, that is why suppliers are likely to tell you that T/T is the only payment method they accept. It is not a warning for you, but shows that they are serious. This payment term is used by all retailers and wholesalers worldwide.

How to Avoid The Risk of Payment Methods?

If you want to buy from China, one of the first things that come to mind is the risks involved. When purchasing from any region, the contract may become be risky, and higher in China. It is essential to follow these golden rules:

  • Never send money to personal accounts via any method of payment: Insist on being given details of the business account of the company you are dealing with, and if you cannot be provided with one, don’t do business with them. Don’t fall for excuses and send money into a personal account unless you never want to see your money or promised merchandise again.
  • Draft a strong agreement: Ideally before you pay potential suppliers any money, you must secure your interests by drafting strong payment terms into the agreement you sign with them. These terms relate to timing of payment and choice of payment method.
Don't let the payment risk go too high.
Don’t Let the Payment Risk Go Too High.

This is all about 4 Important Payment Methods Used in Paying Your Chinese Suppliers, and if you want to get more about the process of wholesales business, please click our official website to read.

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