The Mysterious Payment Methods a Factory Might Ask For

'Do you take Venmo?'

Unfortunately, no. 
But don't worry, paying for your order is less uncomfortable when you understand the different options.

Wire Transfers or Telegraphic Transfer (T/T)

For large transactions, a wire transfer is the fastest way to pay a supplier in China. It is accepted by all Chinese manufacturers and usually takes between 24-48 hours to arrive. You can activate it with your online banking system or set one up at your local branch. Fees vary but generally are under $45 per wire transfer.

Usually when using this method, the supplier will ask for a 30% downpayment of the order and 70% once the order is complete and ready to ship. We highly recommend that you do a secure due diligence check before deciding to send a wire transfer. Once the money has been sent, it's very difficult to get back. More info on supplier due diligence here.

Letter of Credit (L/C)

This is a more old-fashioned form of payment but is still used to add an extra layer of protection for both the buyer and the supplier. Remember, they don't trust you any more than you trust them. Once a Letter of Credit has been applied for and approved, your bank and the supplier's bank will automatically transfer the funds once the conditions of the L/C have been fulfilled. 

Escrow (Through Alibaba or other platforms)

In this payment method, the buyer would deposit the funds into a third party external account throughout the period of the production of the order. It's a secure method as it protects both the buyer and the seller, however can be expensive and locks up your funds for what can be a substantial amount of time. Usually this is used when a buyer and supplier are just starting their relationship, after they would move to T/T payments.


Although it is expensive for the buyer to send money through this familiar platform, many still favor it because of familiarity and buyer protection. However, it is much less popular with suppliers due to difficulties withdrawing money, high tax rates and potential chargebacks that are hard to fight. Not a bad option for small orders or samples. 

Pro tip: Use common sense, and if in doubt, ask a third party to check from China before sending funds. A quick due diligence check could be the difference between 'all good' and 'all gone'. Feel free to contact us if you need help!