How to pay a Chinese supplier safely

Payment is the moment money is most often lost. The goods are not made yet, but the money is already gone — and it matters that it goes to the right recipient on the right terms. Let us break down how to pay a Chinese supplier safely.

Main payment methods

Bank transfer (T/T, telegraphic transfer). The most common method. Money is transferred to the supplier company’s bank account. Convenient and fast, but buyer protection depends on the contract terms and the payment scheme (see staged payment below).

Letter of credit (L/C). An intermediary bank pays the supplier only after the agreed documents are presented (shipment, inspection, etc.). Reliable for large deals, but more expensive and complex to arrange.

Escrow / secured deal on B2B platforms. The platform holds the payment and releases it to the supplier only after receipt/quality is confirmed. Good for first deals and small amounts; used less at large volumes.

Staged payment — the main protection

The baseline safe scheme for production: a partial prepayment to start + the balance after a successful pre-shipment inspection.

Why it works:

• the factory is motivated to produce a defect-free batch, because the final payment is tied to the result;
• you do not pay the full sum upfront for goods not yet made;
• the pre-shipment inspection gives a control point before the cargo leaves.

The specific shares (e.g. deposit and balance) are fixed in the contract.

Iron rules of payment

• Pay only to the company account matching the name in the contract. Payment to an individual’s account is a classic sign of fraud.
• Reconcile details against the contract before every payment.
• Confirm any change of details through another channel — a video call or a call to a known number, not a reply to the email.
• Do not pay the full sum upfront to an unknown supplier — use a staged scheme.
• Fix terms in writing — amounts, timelines, the link to inspection.

The most common scam is “email interception”: at the right moment an email “from the supplier” arrives with new bank details, and the money goes to fraudsters. That is why a change of details is always double-checked separately.

What to watch with currency

• Payments to factories are usually in US dollars; confirm the currency and who bears bank fees.
• Account for exchange-rate movement between the deposit and the balance in your budget.
• All currency and fee terms — into the contract.

Checklist before a transfer

1. Is the recipient a company account, name matching the contract?
2. Are the details reconciled against the contract and unchanged “at the last moment”?
3. Is payment split into stages, the balance tied to inspection?
4. Are the amount, currency and fees fixed in writing?
5. If details changed — confirmed through a separate channel?

If even one point is in doubt — do not transfer until it is clear.

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Don’t want to risk it on payment? We work under a contract with staged payment and a pre-shipment inspection — the payment is tied to the result, not to promises. We will explain how it works, for free.