How to Pay Chinese Suppliers: Payment Methods Compared
TL;DR: T/T (bank wire transfer) is the most common payment method for China manufacturing — typically 30% deposit before production and 70% balance before shipment. PayPal works for small orders. Letter of Credit (L/C) provides the most protection for large orders. Never pay 100% upfront.
Payment Methods Comparison
| Method | Best For | Fees | Protection |
|---|---|---|---|
| T/T Wire Transfer | Most orders ($5K+) | $25–$50/transfer | Low (no dispute mechanism) |
| PayPal | Small orders, samples | 3–5% of amount | High (buyer protection) |
| Trade Assurance | Alibaba orders | 0–3% | Medium (platform mediation) |
| Letter of Credit | Large orders ($50K+) | 1–3% of order value | Very high (bank guarantee) |
| Western Union | Not recommended | $25–$50 | None (cannot be reversed) |
Standard Payment Terms for China Manufacturing
- Samples: 100% payment before shipment (via PayPal or T/T)
- Small orders (<$5K): 50/50 or 100% before shipment
- Standard orders ($5K–$50K): 30% deposit + 70% before shipment (after QC inspection)
- Large orders ($50K+): 30% deposit + 70% against shipping documents, or Letter of Credit
T/T Wire Transfer: The Standard Method
T/T (telegraphic transfer) is the most common payment method in China trade. Here's how it works:
- Factory sends you a proforma invoice with bank details
- You wire the deposit (30%) to their bank account
- Factory begins production
- After production, you or your agent inspects the goods
- You wire the balance (70%)
- Factory arranges shipment
Safety Rules
- Never pay 100% upfront — this eliminates your leverage for quality issues.
- Verify bank details by phone — email fraud (changing bank details) is a real threat.
- Pay to a company account, not personal — legitimate factories have corporate bank accounts.
- Keep payment receipts — you'll need them for customs declaration.
Need Help Sourcing from China?
Our Shenzhen team can help you navigate the sourcing process — from factory selection to quality control and shipping.
Send Inquiry