The best way to pay Chinese suppliers

Best way to pay chinese suppliers

Friday, 24 February 2023, 5 minute read

If you've ever imported products from China, you’ll know that paying Chinese suppliers can be a complex, time-consuming and expensive task.

Once you’ve got past the first hurdle of applying for and receiving your import licence, you need to figure out the best way to pay foreign suppliers securely and cost-effectively. 

From cutting out high rates and sneaky hidden fees to avoiding fraud and getting the best exchange rate, there are a lot of factors to consider when it comes to paying Chinese vendors. 

In today’s article, we'll break down the pros and cons of the most popular ways to pay international suppliers in China, reveal the best way to pay these vendors cost-effectively, and share our top tips for choosing the right international payment method for you.

How to pay Chinese suppliers

Bank transfers

You can choose to pay Chinese suppliers via bank transfer; a fairly straightforward and popular method of payment.

However, there are a few downsides to this payment method. Firstly, bank transfers can be slow when you're sending money internationally. You'll also likely have to pay a fee, on top of hidden charges when you’re converting currencies, which can add up if you're making frequent payments.

If you do choose to pay your Chinese supplier via bank transfer, it's important to ensure that you're sending the money to the correct account. Scammers have been known to pose as Chinese suppliers and provide false bank account information to unsuspecting buyers, so be sure to verify the Chinese supplier's bank account details before sending any money their way.

Use an open banking solution like Crezco

With a digital account-to-account payments platform like Crezco, you can pay overseas suppliers directly from your existing local bank account, benefitting from ultra-competitive rates - and no hidden fees. 

When you use Crezco’s cross-border payment solution, you can be confident that your payment will be made quickly, securely and cost-effectively, with minimal effort required on your part. 

Crezco will also provide both you and your Chinese supplier with complete transparency, as both parties will get live updates when payments leave your account and arrive in theirs. 

Using an open banking platform is also the safest way to pay your Chinese supplier, thanks to Crezco’s use of open banking and award-winning proprietary risk tools (Sentinel), which keep international payments safe and secure. 

The foreign supplier will also automatically receive remittance advice as soon as you make your payment, serving as an official record of the transaction and letting them know the payment has been made. 

Crezco can help

Crezco makes international account-to-account payments easy and secure, letting you make international payments directly to the supplier’s existing local bank account without creating any virtual IBANs or local wallets.

Start for free

You can make international payments to Chinese suppliers either individually or in bulk, to over 50 currencies worldwide, including Chinese Yuan. This makes Crezco’s solution an ideal choice when paying Chinese suppliers for goods - especially when you’ll be doing business with them regularly.


PayPal is another popular way to pay overseas suppliers, although not many Chinese suppliers accept this payment method yet. The advantage of using PayPal is that payments are fast and easy to set up. Additionally, PayPal offers buyer protection, which can be reassuring if you're worried about the risk of fraud.

However, PayPal’s exchange rate mark-ups are high. Extra fees for international transactions are also charged as a fixed percentage, so when you’re buying goods in bulk, PayPal can quickly become an expensive way to pay.

Read more: PayPal vs Crezco


Owned by Alibaba, one of the biggest online marketplaces in the world, AliPay is a Chinese payment platform which is widely used in China. In fact, many Chinese suppliers prefer to be paid via AliPay and will request it specifically. 

AliPay is similar to PayPal in many ways, but one advantage of AliPay is that it offers a more competitive exchange rate than PayPal. Additionally, AliPay is free to use for you as the buyer, although there may be fees for sellers.

However, AliPay is not well-known outside of China, which can make it difficult for some buyers to use, and it doesn’t always offer comprehensive buyer protection, meaning it isn’t the safest way to pay.

Read more: How to pay Alibaba suppliers?

Escrow services

Escrow services are an option for buyers who are concerned about the risk of fraud when paying Chinese suppliers. This method of financing is often called Cash Against Documents, or ‘Documents Against Payment’, and requires the buyer (or importer) to pay for their goods before receiving them. In other words, there is no release of the product to the buyer – or importer – until the payment has been made, meaning both parties' responsibilities are equally fulfilled at the time of exchange.

With an escrow service, the buyer deposits the payment with a third-party company, which holds the funds until the buyer receives the goods and confirms that they're satisfied with the purchase. The escrow company then releases the payment to the supplier. The process is similar to buying a house, where a solicitor or other third party agent holds all funds in escrow until completion takes place.

One advantage of using an escrow service is that it can provide peace of mind for both buyers and suppliers.

However, there may be fees associated with using an escrow service, and the process can be much slower than other payment methods.

Letters of Credit

Letters of Credit (LCs) are a common way for businesses to pay for goods in international trade - but they’re mainly designed for enterprises making large transactions. 

With a Letter of Credit, the buyer's bank guarantees payment to the Chinese supplier, as long as the supplier meets certain conditions, such as providing proof of shipment. Letters of Credit can be a good option for enterprises making large transactions, as they provide a level of security for both buyers and suppliers.

However, they’re also pretty complex and time-consuming to set up - and there’s a lot of paperwork involved. Plus, letters of credit are one of the more expensive ways to pay Chinese suppliers due to high fees, making them an impractical choice for small transactions or for small to medium-sized businesses.

Pay Chinese suppliers by credit card

While a few suppliers in China do accept credit card payments, many don’t in order to protect themselves from fraudulent payments. 

You may also incur extra fees when paying Chinese suppliers by credit card, so this payment method can be a bit of a lose-lose for both you and your supplier.

Cash payments

Cash payments are widely accepted in China, and your supplier may even offer you a discount for paying by cash. 

However, this is the riskiest payment option for you as the buyer. In case of any dispute, there is little to no protection, leaving you vulnerable to potential losses. Additionally, paying by cash puts you at risk of major exchange rate mark-ups.

Read more: What is a PO number?

Choosing the best way to pay Chinese suppliers for your business

Now that we've covered the most popular ways to pay Chinese suppliers, let's look at some tips for choosing the best payment method for your business’ specific needs.

Consider the size of your business - and transactions

If you're making small transactions, it may be more practical to use a payment method that doesn't involve high fees and automates all of the paperwork, such as online payments platform Crezco.

Check with your supplier

Before making your decision, we recommend checking with your Chinese supplier to see what payment methods they accept. Some suppliers may prefer certain payment methods, or they may have restrictions on the types of payments they can receive.

Look at current exchange rates

When paying Chinese suppliers, you'll need to consider exchange rates, which can have a significant impact on the cost of your transaction. Look for payment methods that offer competitive exchange rates, and be aware of any fees or charges that may apply. You can use our handy currency converter to find out the current exchange rate for a wide range of currencies.

Read more: How to calculate an exchange rate?

Look into buyer protection

If you're concerned about the risk of fraud when paying Chinese suppliers, look for payment methods that offer buyer protection, such as PayPal, or go for an open banking solution that uses proprietary risk tools, like Crezco.

Plan ahead and make payments promptly

Whatever payment method you choose, it's important to plan ahead to ensure that the payment is processed on time. International wire transfers can take several days to complete, so make sure you leave enough time for the payment to clear before your supplier ships the goods.

The best way to pay Chinese suppliers

As we’ve covered, there are several ways to pay Chinese suppliers, each with their own advantages and disadvantages. 

When you look at the drawbacks of some of these methods - and how many of them require paying excessive or hidden extra fees - it isn’t hard to see why many businesses make mistakes and lose money when paying Chinese suppliers. 

However, there is a simple way to reduce the costs and risks involved with paying Chinese suppliers - through using an account-to-account payments solution. When you weigh up the options, open banking platforms like Crezco offer the safest, most cost-effective and best way to pay Chinese suppliers and other international vendors.  

We hope you now have a better idea of the best way to pay your Chinese supplier safely, cost-effectively and quickly. Happy importing! 

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