How to pay China suppliers on Alibaba?

By justchinait
April 27, 2021

When you plan to place an order on Alibaba, you must be confused about the various payment methods on the platform, and don’t know which one is better and safer.

Remittance of thousands or even tens of thousands of dollars to people you may never know can be a frightening step. While most suppliers in China prefer direct transfers, it is not the safest approach. This is a problem that many buyers have encountered. There are indeed many differences between payment methods on Alibaba.

So We’ll break them down in today’s post to help you make the right choice.


D:\运营\Website\网站图片\阿里巴巴付款\Alibaba payment methods.pngAlibaba payment methods

1. PayPal

If you’re looking for a way to make small instant payments, PayPal might be worth considering. PayPal, available as a mobile application, is a great way to make low initial payments to potential suppliers while developing business relationships. PayPal is a method that is widely used in more than 200 countries around the world. It supports more than 100 currencies.

Also, as a buyer, you don’t have to pay transaction fees through PayPal. However, if you want to use Paypal, the order will be withdrawn from Alibaba. This means that you can remit money directly to suppliers without using Alibaba. In this case, Alibaba will be just a platform for information exchange. Therefore, it will not provide a protection service for your order.



1) Money safe

Just like Alibaba’s trade assurance service, you can also apply for a refund from the PayPal platform if an item is found to be substandard or there are some other problems (for example, you did not receive the goods). You will receive a refund from Paypal if you pass the evaluation. Despite PayPal’s focus on protecting buyers, there are still some risks. Their protection policies are complex, especially for international transactions. If there is a dispute, it may take some time to file a claim and, of course, you may not win.

2)  Quickly and easily

These transmissions are usually instantaneous. So if you have a PayPal account, this is a very convenient option.

It will arrive immediately after the buyer pays. Account registration is also very simple, you only need an email address to register and open an account for free.

You can arrange payment anytime and anywhere, no time or place required.


1) PayPal’s processing fees are relatively high

Paypal charges a percentage of the transfer fee and uses its own exchange rate to increase the money. Paypal may be an easy and convenient way for you as a buyer to pay, but vendors in China have to be hit with high fees when transferring funds from Paypal to a Chinese bank account.

2) Not accepted by many suppliers

Not all vendors on Alibaba accept PayPal. Many vendors in China have yet to accept PayPal, but the number is growing. It is becoming increasingly popular for small transactions, especially sales of electronic products. The service is not universally popular among providers – they share stories about unexpected cash recalls online.

Simply put, we recommend that you use PayPal for your first order or sample payment. Especially when you need to determine whether the supplier is reliable.

Paypal can provide you with good buyer protection services.

2. Wire Transfer (T/T)

1) International wire transfer

This is the most common method of payment and has been widely accepted by suppliers. Especially for most smaller factories, this is their preferred method of payment. In China, not only are businesses familiar with bank payments but telegraphic transfers are considered the best practice for sending money to China.

Wire Transfer


  •  Security

Although there is no built-in payment protection, banks usually do some sort of identity check on businesses and people with whom they have accounts, so it is considered a more secure method of payment than many other companies.

  • Simple and clear

In most cases, you can go directly to a bank branch (or through your bank’s e-banking portal) and transfer money from there.

  • Nothing else

You do not need to set up any other accounts or start any new ones.


  • There are expensive international transfer/SWIFT fees

Since most wire transfers are usually made from one bank to another, payment methods may involve sending and receiving bank charges, high SWIFT bank charges, and handling unfavorable foreign exchange markups. Typically, its transaction fees are usually between $20 and $80 per transaction, depending on the payment amount and policy of the paying bank. You can negotiate with the vendor who, the vendor or others will share the transaction costs.

  • Inefficient

The time of arrival of the wire transfer is the most relevant issue. Time varies widely from three working days to one week for each bank. Depending on the route of the remittance, you may have to wait a long time. The supplier will usually only arrange production after receiving the deposit. This can affect the manufacturer’s efficiency when you are particularly anxious. As these transactions may take two to five business days to process, the supplier is also exposed to exchange rate fluctuations from the time the payment order is signed to the date the payment is deposited with the supplier’s bank.

  • Partial payment

Suppliers will often insist on a deposit to reduce their risk, which in turn increases your risk. The usual practice in Chinese business is to pay a 30% deposit in advance. This means you will pay two sets of fees. One is that when you order, the supplier will arrange production only after receiving your deposit. The other is after the goods have been manufactured and before they are shipped or before the supplier releases the original B/L to you.

In general, you should also be prepared to provide more information about the transfer when sending money into China. For example, you should have invoices and shipping company details, and basically be ready to explain what the purpose of the transfer is.

Wire transfer between banks is one of the most common payment methods.

It is best to use this method if you have already done some due diligence on the vendor (for example, to verify that they are a legitimate supplier to a registered business before you pay them). Generally, the method of payment is more suitable for large orders.

2) Domestic Wire Transfer

In 2018, Alibaba introduced a new payment method, domestic wire transfer. In this way, you can transfer funds to a domestic receiving account using’s remittance channel partners with local currency instead of wiring funds to an overseas bank. Currently, it is available in the USA, Canada, Australia, The United Kingdom, most countries of Europe.

If you have a domestic TT account, there will be 2 accounts for you to choose from when you are ready to arrange payment.

There are mainly 3 features for domestic wire transfer,

Domestic Wire Transfer

  • Low transaction fee
  • Faster processing time
  • Lock the exchange rate for 7 days

The following chart shows the differences between domestic wire transfer and international wire transfer.

Domestic wire transfer International wire transfer
Transaction fee Around 1 unit of local currency $20-80 for each transaction
Processing time 1-2 business days 3-7 business days
Fixed exchange rate Locked exchange rate for 7 days Not supported
Supportable regions  US, Australia, Canada, New Zealand, Japan, Mexico, UK and other European countries No limited

3. Western Union

Western Union West is the world’s leading Courier remittance company with a history of 150 years. It has the world’s largest and most advanced electronic remittance financial network, with agents in nearly 200 countries and regions worldwide.

Western Union is a subsidiary of First Data Corporation (FDC), a Fortune 500 company.

Western Union is a global financial services and payments network that users in the United States can use to send money to recipients. For this method of payment, the payee can usually receive the payment within 1 working day.

Western Union


Fast collection, within minutes to reach the account.


  • Limitations of big

At the moment, Western Union is only available to US buyers. Only payments of less than $2,500 can be processed.

  • High fees

Regarding the cost, the Western Union handling fee is for the payer’s account, and the payment fee varies by country/region. You can refer to the following table to find out the handling fee you need to pay.

Payment Amount (USD) Transaction Fee (USD)
0.01 – 50.00 4.90
50.01 – 100.00 8.00
100.01 – 250.00 10.00
250.01 – 500.00 12.00
500.01 – 750.00 15.00
750.01 – 1000.00 18.00
1,000.01 – 2,500.00 1.80% of payment amount
  • Unsafe

It doesn’t really offer them any payment protection。

While Western Union is convenient for individuals who want to send money around the world on an emergency basis, most serious buyers avoid this payment method. It is also rare for legitimate suppliers to demand payment through Western Union.

Therefore, if you hear any potential suppliers asking for payment in this way, please be on your guard. If this is the first order between you, payment terms are not recommended. Unless you are certain that the supplier is reliable, you may consider this approach.

4. Online transfer

Online Transfer is a convenient online payment method which is applicable to large payment amounts. By cooperating with recognized third-party financial institutions such as Trustly, Ideal and Sofort, you can complete payments in local currencies at any time without having to set up a separate payment account.

Online transfer


  • Convenient and quick

Performed on PC or app at any time, 24/7 service. Processing time is Usually 1-2 business days

  • Transaction fee fixed

No matter how much you remit, the transaction fee is $5000.


  • Restrictive

Each transaction is limited to $300,000 (Sofort currently only supports transactions below $5,000)。 And this payment method is currently available only to users in Europe.

For more instructions, please refer to Alibaba’s official guide:

5. Credit card

This is a very fast method of payment, and the payee can receive the payment within 1-2 hours. But it sets a limit of $12,000 per transaction. You’ll need to pay a transaction fee: 2.99% of the payment amount (up to $40 for MasterCard paid in US dollars in Asia Pacific and up to 3.5% for American Express payments).

You can accept Visa, MasterCard, Diners, Discover, JCB, American Express. It supports many different currencies: USD, AED, AUD, BRL, CAD, EUR, GBP, HKD, ILS, INR, JPY, KRW, MXN, MYR, PHP, PLN, RUB, SAR, SGD, THB, ZAR.

Credit Card


That’s because credit and debit card payments incur charges for the supplier, which they may pass on to you.

The risks are low for you as the buyer, but high for the supplier. Fraudulent buyers can lead to high losses for the seller. Which makes cards an unpopular way of doing business among Chinese suppliers.

6. Pay Later

Alibaba Pay Later is a new payment method on Alibaba, which is only available for buyers in the USA currently. When you use the method, the third-party financing institution will help you pay. Then you repay the loan.

But if you want to apply for the loan, you need to be in the Alibaba business for at least one year. Once approved, you can access up to a 6-month loan of $150,000 on Alibaba. The minimum rate is 1.25% for the first month. The loan limit you can get will be given by Kabbage Funding according to your business performance.

In addition, there are no prepayment penalties, so you can prepay a loan at any time. There are no order transactions, origination, annual, or maintenance fees. ( The service currently unavailable)

Pay later

7. Boleto

Boleto is the most commonly used payment method in Brazil. And users can complete the payment through online banking or offline banking agencies.

But the monthly payment amount should be within $3,000, the transaction fee is 1.5% of the payment amount.


8. FAQs About Alibaba Pay

1) Is installment payment available in Alibaba Buy Now Pay later?

It is good to know that installment payments are now available for buyers on Alibaba. With Buy Now Pay Later, payment becomes easier.

There is pay later option on Alibaba. It is a simple method to pay for your purchases. If you are only a small business, you can apply for $150,000 in credits using this financing option.

You can have the Alibaba payment plan using Kabbage. It is a licensed payment company in the US that can help process pay later and installment terms. It is a trusted company for buyers when they look for funding ways.

Aside from Kabbage Pay Later Alibaba, you can apply for payment terms by going to their website. You can have up to 60 days to pay your dues. It depends on the approval you will get from their payment terms. You need to pay the initial 30% of the total. You will pay the rest in 60 days.  

When you take advantage of Alibaba Pay Later, you can build your account and get up to a six months loan term with low rates. It will make payment easier for you if you are a small business.

Buy Now Pay Later platforms help buyers pay from Alibaba stores without paying all the costs in one straight payment. If you are in the US, you can use an app called ZIP, where you can check out your items and pay in four installments. You will be given six weeks to pay your total purchase and split the payment into four.

2) Can you get your money back if you get scammed on Alibaba through Alibaba Payment Protection?

Yes. As long as you pay your orders through the secure payment platform, you can get your money back when you are scammed. It is only applicable if you order through Trade Assurance suppliers. You can get a full refund if you do not receive the products or do not meet the quality standards. 

Alibaba has suppliers who are doing bad practices when selling. For example, some suppliers will send you a high-quality sample but will deliver low-quality products. They can sell the products to you at a low price but will change the amount and increase it after you make an order.

Sellers that are registered to Trade Assurance will not do any of the bad practices because they know the repercussions if they do so. If you are scammed after paying through the Alibaba Payment protection option, you can file a dispute and will receive a full refund if you are scammed.  

Please avoid doing the following, so you will not be disqualified when the suppliers scam you:

  • Even for a big discount, do not send money to a salesperson’s personal account. You are no longer qualified for Alibaba’s trade guarantee if you do this to an Alibaba supplier or sales representative.
  • Do not cancel your payment on Trade Assurance. Suppliers may offer justifications for not accepting Trade Assurance, but it is in your best interest to only make payments through Alibaba secure payment. It is the safest way to pay on Alibaba.
  • Do not send funds to a brand-new bank account. An email that requests a modification can be a hoax. Get in touch with your supplier to avoid this.

3)Will all Chinese suppliers on Alibaba accept Paypal?

Alibaba supports PayPal payments, but many vendors in China don’t accept it. There are two main reasons,

  • Higher transaction charge

The seller pays a transaction fee and a withdrawal fee. Transaction fees vary according to PayPal accounts in different countries/regions. For Chinese accounts, the criteria range from 3.4% + 0.3 $to 4.4% + 0.3 $, depending on the amount received each month. In addition, when they withdraw dollars into their mainland Chinese bank accounts, they pay $35 per transaction.

As a result, the overall cost is relatively higher than other payment methods.

  • Supplier’s Risks

PayPal has a good buyer protection policy.

You may dispute and provide the required evidence within the specified time. PayPal will mediate the dispute and evaluate the evidence you have provided, and then come up with a solution for full or partial compensation. However, although the products are of good quality, there are still some dishonest buyers who apply for refunds due to quality problems. In this case, the seller’s account is at risk of being frozen and its interests are not well guaranteed. As a result, many vendors will not accept PayPal for large orders. But for certain sample orders, some suppliers will agree.


4) What does trade assurance mean on Alibaba?

Alibaba provides a free service called Trade Assurance. It aims to promote trust between suppliers and customers. If there are shipping or quality-related problems, Trade Assurance will protect you.

Trade Assurance is the safest way to buy from Alibaba. As a buyer, you need security and protection when you buy online. It is your assurance that if a bad outcome arises during your transaction, it will be resolved.

It gives you coverage of the following:

  1. As per the agreement with your supplier, your products are not delivered on time.
  2. Your goods fall short of the quality requirements outlined in the contract you have with your supplier.

If you made an order that Trade Assurance covers, rest assured that you will get a resolution. It means that Alibaba can refund the cost, or the supplier will come to terms with you to resolve the issue. Thus, making you a satisfied and happy customer.

Do know that there are rules and regulations under Trade Assurance. There should be constant communication between your suppliers. You must contact them and respond to their queries and updates. Also, keeping a record of everything can support your claims.

A Trade Assurance gives you peace of mind when you want to buy from new suppliers. It gives you a guarantee that the supplier will adhere to your agreed terms. This is very important for small businesses or even long-time buyers who are trying out new sellers. It helps you mitigate risks for first-time deals.

5) Is it safe to pay by Alibaba trade assurance?

The best way to pay on Alibaba is through Trade Assurance coverage. It guarantees resolution if your products are not delivered on the agreed time or have quality issues. It is the safest way to pay on Alibaba if you have trust issues with buyers. 

When ordering, you only need to buy from suppliers with a badge of Trade Assurance on the Supplier type. So when you search for a product, you need to see and tick this option to ensure you can use this feature.

Verify whether the supplier has registered with Trade Assurance. You can take advantage of the cost savings if they have signed up. It assures you that when placing your order, you can choose the quality of the goods and the shipment date.

Paying through Alibaba Trade Assurance also allows you to use a product inspection service. There is a fee you have to pay for this, but this is a feature you can have on your Trade Assurance order. You can choose between Basic Inspection 50 pieces ($88) or up to 500 pieces ($150).

There are five payment options available when ordering from Alibaba Trade Assurance:

  • E-Checking

This is available for buyers that have checking accounts in the US or Europe from any bank. There is a low transaction fee of $15 for every transaction you make using this option.

  •  Credit Cards

You can use your Visa or MasterCard. There is a limit of $12000 per transaction.

  • Wire Transfer or Telegraphic Transfer (T/T)

The fee may vary according to your country. It needs around 3-7 working days before the funds arrive in your supplier’s account.

  • Pay Later

You can apply for up to $150,000 with competitive rates and then pay using simple monthly fees.

  • Boleto Payment

If you are shipping to Brazil, this is what you need to use. There is a $5000 payment limit per month on each account and you need to pay the transaction fee of 1.35% per transaction in USD.

6) What are the rules in Alibaba Refund Policy?

You will be entitled to file a late shipment claim if the provider fails to deliver by the deadline specified in your contract. You have the option to resolve it by talking directly to the suppliers. 

However, if the supplier is not willing to resolve the issue for you, Alibaba will refund you the amount covered and stated in the contract. Below is the summary of the rules in the Alibaba Refund Policy:

  • The seller of the product on Alibaba must respond to the buyer’s request within five (5) calendar days after the buyer submits or amends it. Alibaba will process the buyer’s refund request if the seller doesn’t answer within five calendar days of receiving the buyer’s request. Any service fee(s) that the Buyer paid is not included in the refund.
  • The Buyer must respond to the Seller’s alternative resolution to the refund request within five calendar days. Alibaba will revoke the buyer’s request for a refund if they fail to respond to the seller’s alternate resolution within five calendar days.
  • Both the Buyer and the Seller may ask Alibaba to get involved following the Seller’s initial answer to the Buyer’s refund request. The entire negotiation process for the return cannot last more than thirty calendar days, called as “Prescribed Period”. Alibaba will automatically handle the Buyer’s refund request if the Buyer and Seller cannot have an agreement within the Prescribed Period.

7) What is a Buyer Protection on Alibaba?

Alibaba created a free service called Trade Assurance that serves as Buyer Protection. It is a built-in protection service if you place your orders and made your payment directly through their website. The goal is to establish trust and give you confidence when buying in Alibaba.

Trade Assurance protects a buyer if the supplier does not ship the products on the agreed time or the quality of the product you received is not as promised. If they provided a low-quality product and did not pass a certain standard, you have the right to file a dispute, and Alibaba will handle it through your supplier. 

Trade Assurance does not ask for any fee if you want to use the service. However, there are transaction fees you will pay depending on the type of payment you will choose. 

The Buyer Protection through Trade Assurance allows you to apply for a refund within 30 days of its scheduled delivery. They will investigate what transpired and communicate with the supplier. Provided you made a transaction with a Trade Assurance supplier, you can rest assured that Alibaba will resolve your issue and refund payment if necessary.

8) How does Trade Assurance serve as your Alibaba order protection?

Trade Assurance works as protection on your orders until you receive them and have a satisfactory outcome. Alibaba wants to make online shopping simple and secure for the shopper. Because of this, they provide a money-back guarantee if your order doesn’t fulfill the correct specifications that you and the supplier agreed upon.

Once you use this free service, your orders are guaranteed to be secure. You do not have to do anything else because Alibaba will take care of it once you send your orders and make a payment. Your order is safe when you pay with a credit card, PayPal, or Alipay.

By ensuring that the payment terms are secured until the products arrive at your address, you are totally covered with Order Protection. Alibaba will refund your money if you never receive the ordered goods. After that, they will initiate a dispute on your behalf with the supplier.

Suppliers on Alibaba get an incentive if they are able to commit to providing satisfaction to their clients. There is a credit-rating system for all suppliers under Trade Assurance so they can get rewarded for the good services they provide to their clients.

9) Can I pay suppliers by L/C on Alibaba?

Payment via L/C is available on Alibaba. Letter of Credit (L/C) is one of the most secure instruments available to international traders. A letter of credit is an undertaking made by the bank on behalf of the buyer to pay the exporter provided that the terms and conditions specified in the letter of credit have been met and have been verified by providing all the necessary documents. It will be safer for both parties. For buyers, it can reduce the risk of products not in accordance with the documents. For suppliers, they can receive money on time.

In addition, the way has no limit for the order amount, so it is suitable for large orders. You can choose to issue the usance L/C, which is beneficial for you to manage your cash flow.

But L/C will need a lot of extra paperwork and not all companies can issue L/C. The issuing bank will give the credit line after evaluating the company performance. So for small orders, L/C is inadvisable.

10) Are there any restrictions on using the Pay Later option to pay for my Trade Assurance orders?

In order to use Pay Later for a Trade Assurance order, the Pay Later line of credit must be more than or equal to the Trade Assurance payment amount.

11) What is the most secure payment method on Alibaba?

Choosing Alibaba Trade Assurance Service is the safest way to pay Alibaba suppliers. If there is a problem with the product, you can open Alibaba Trade Assurance Dispute, Alibaba will mediate and settle. In addition, Trade Assurance supports a variety of payment methods, including credit card, T/T (bank transfer), online banking payment, online transfer, Western Union, PayLater and Boleto. However, while Alibaba Trade Assurance protects you well, it is not 100% safe. The most important thing is still to choose a reliable supplier. Before placing an order, you need to make a comprehensive evaluation from many aspects, such as its expertise, communication efficiency, etc.

12) What is Online Transfer?

Online Transfer is a third-party payment transfer method offered specially for European buyers. Buyers can make payment online via their bank accounts in local currencies through in total eight different payment channels: iDeal, Sofort, Trustly, Giropay, PayU, P24, Bancontact and EPS.

13) What is the best way to pay in Alibaba?

There are many ways of payment on Alibaba, such as L/C, T/T, Western Union and so on. Each approach has advantages and disadvantages, which I explained in the last section. In addition, some methods are limited in certain aspects (e.g. country/region), so it is difficult to define which method is the absolute best method. All you have to do is choose the right one according to your actual needs.

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