How To Pay and Best Ways Pay Chinese Suppliers?
I get a lot of inquiries from new importers wanting to find out the best way to pay their Chinese suppliers. These importers are especially concerned about the “safety” of their funds having read some horror stories online.
When importing from China or from any country for that matter, there is no “Best” Payment Method and the choice of method depends on several factors, with the most important being the amount of payment.One of the most popular questions I see on online forums is about the safety & popularity of Paypal as a payment method. Paypal has gained more and more acceptance in the last few years and is a commonly accepted payment method now, especially with tech-savvy e-commerce sellers.
However, it’s not feasible for larger transactions as their fee is percentage based. You could agree with the supplier to pay the fee, but it can upset your costing and for larger transactions is not the most prudent investment in terms of securing the transaction. It is fairly common for suppliers to pass on Paypal fees to the suppliers as a 3.5%+ fee + currency conversion loss can really eat into suppliers margins.
Also, there is a lot of confusion online about Paypal’s “buyer protection” policies for international transactions and it can be hard to win claims. All in all, the great payment method for sourcing very small quantities and samples, but not for serious importers in my opinion.
The majority of the Paypal accounts are either held by individuals or by Hong Kong registered companies managed by mainland China-based individuals. You are covered much better with Paypal, when using “Paypal checkout” on websites, as opposed to sending directly to Paypal accounts.
Other Payment modes for paying Chinese supplier
There are other two widely accepted payments methods.
The first is Alipay
The Second is WeChat Pay
Most vendors accept these 2 payments instruments for samples and even orders. With Alipay and WeChat pay all you ever need is your mobile which you carry anyways.
To be fair you actually need a local Chinese bank account linked for them to be really useful but if you are outside China you can still link your Viisa or Master card, just that you will not be able to use the full range of payment services.