When you procure products from an overseas supplier, it is essential to seriously consider payment methods. Payment fraud is common like email account hacking of communication between suppliers and buyers. There have been cases, where the supplier doesn’t get the money and they stop the shipping of purchased products. There are delays in retrieving products because it takes time to clear the tension and understand what happened. Therefore it is essential for overseas buyers to consider safe ways to send money to China.
What are the standard payment terms with Chinese suppliers?
The standard payment terms with Chinese suppliers can vary depending on the specific supplier, product, and negotiation. However, some common payment terms include:
- T/T (Telegraphic Transfer):This is the most common payment method used by Chinese suppliers. T/T involves transferring funds electronically from the buyer’s bank to the supplier’s bank. The buyer usually pays a deposit (e.g., 30% of the total order amount) before production begins and the balance is paid before shipment.
- L/C (Letter of Credit):This is a more secure payment method for the buyer, as the supplier is guaranteed payment once they meet the terms of the L/C. The buyer establishes an L/C with their bank, which guarantees payment to the supplier once they provide the required documentation.
- Escrow: An escrow service can be used to ensure that both parties are protected. The buyer deposits the funds into an escrow account, and the supplier is paid once the buyer confirms that the goods have been received and are satisfactory.
It is important to establish clear payment terms with your supplier and to confirm these terms in writing. Be sure to negotiate the best terms possible, and consider using a trusted third party to verify the supplier’s credentials and ensure that they are reputable.
When sending money to China for supplier payments, it is important to consider the safety and reliability of the payment method chosen.
Here are some safe ways to send money to China for supplier payments:
- Bank Transfer: This is a popular and safe way to send money to China. It involves transferring money directly from your bank account to your supplier’s bank account. The bank transfer can be done through online banking or by visiting your local bank branch. However, it is important to confirm with your supplier that they accept payments through bank transfer and to confirm their banking details. Make sure to double-check the recipient’s bank details before sending the money.
- PayPal:PayPal is a reliable and secure option for sending money to China. You can transfer money from your PayPal account to the supplier’s PayPal account instantly. You can also link your bank account or credit card to your PayPal account for faster transactions. However, it is important to note that some suppliers in China do not accept PayPal payments due to the fees involved. This method is also less common for large orders.
- Western Union: Western Union is a global money transfer service that allows you to send money to China quickly and securely. This service is widely accepted in China, and your supplier can receive the money in cash at a Western Union agent location. You can send money using your bank account, credit card, or debit card. However, it is important to note that Western Union charges high fees for their service.
- TransferWise: TransferWise is a popular online money transfer service that offers a fast and secure way to send money to China. This service uses mid-market exchange rates and charges low fees, making it a cost-effective option. Your supplier can receive the money directly in their bank account in China. You can also track your transfer in real-time and get updates on when the recipient receives the money.
- Alipay: Alipay is a mobile payment platform widely used in China. If your supplier has an Alipay account, you can transfer money to them through the platform. You can link your bank account or credit card to your Alipay account for faster transactions. Alipay offers a fast and secure way to send money to China, and your supplier can easily withdraw the money to their bank account.
- MoneyGram: MoneyGram is another secure and reliable option for sending money to China. You can send money online or in person at a MoneyGram location. You can also track your transfer and receive a notification when the recipient receives the money.
It is important to research and compares the fees, exchange rates, and security features of each payment method before making a decision. Also, make sure to confirm with your supplier that they accept the payment method you choose.