The trouble of paying your suppliers swiftly and conveniently in a way that benefits both sides will be familiar to you if your business requires you to order goods and services regularly from China.
Sending money to China may be an expensive, difficult, and time-consuming operation because the country has such strong capital restrictions and has only been involved in international trade for about last 20 years.
Let us discuss what can be a safe way to send money to China suppliers in this post, if you are going to do any business in that country.
International wire transfers through your bank
The easiest way to pay your Chinese vendors is using a wire transfer from your bank abroad.
It is simple to make the transfer through your online banking system or local branch if you already have a business account.
Use local transfer by setting up an account in Hong Kong
Many Chinese suppliers have Hong Kong Business Accounts to deal with their Western trading partners.
Sending payments via local transfer at a local rate and fee is easy if both you and your supplier have Hong Kong business accounts.
Through any third party
All above ways to pay Chinese suppliers can be expensive and time-consuming for many SMEs and start-up companies.
Sending money through a third-party service is an alternative way to solve this problem in order to avoid accruing fees and foreign charges.
For businesses looking to pay suppliers and accelerate payment for sample orders or minor transactions, PayPal is an attractive alternative and a safe way to send money to China because it offers simple and quick transactions through credit cards or linked bank accounts.
Letter of credit
Compared to many other forms of payment, letters of credit, or L/Cs, provide a higher level of protection.
A letter of credit (L/C) is a bank’s guarantee that a purchaser will pay a seller on schedule and in full.
In this payment method, a dependable third party keeps the money the buyer has agreed to provide the supplier and only gives the money to the seller if specific requirements are satisfied.
Smaller vendors offer Western Union (WU), which enables you to send money fast, wherever you are in the world and regardless of whether you pay online or in person at one of their physical sites.
Payments to Chinese vendors can be managed effectively by using sourcing agents.
These Chinese businesses, with their established connections and comprehensive understanding of the regional supplier market, are perfectly situated to serve as intermediates.
Alibaba trade assurance
Alibaba Trade Assurance is a payment and protection service that offers through its sizable online business.
This solution is a safe way to send money to China for companies who purchase goods from Alibaba platform suppliers.
If the supplier does not adhere to the conditions of the order contract, such as quality and shipment time, it provides protection for overseas customers.
Cash payments can still be made for small, in-person transactions or when doing business with local, smaller suppliers, despite being less popular in today’s digital world. Cash provides instant payment and does not charge transaction fees.
To sum up, keep in mind that it is always important to research suppliers and run in-depth background checks before paying them, especially Chinese ones.
In China, wire transfers can be a most safe way to send money to China suppliers. However, you might prefer the speed and convenience of PayPal and Western Union for those modest to medium-sized transactions.