Paying a supplier on the other side of the world, in another currency, without ever having met them in person, is uncomfortable, and it should be. The good news is that international trade has developed, over decades, payment methods that protect the buyer to different degrees. Understanding each one lets you choose the right path for each situation, rather than simply "hoping for the best".
Why the payment method matters so much
The choice of payment method defines who carries the risk and at what point. Paying 100% in advance puts all the risk on the buyer: if the supplier fails to deliver, or delivers the wrong thing, the money has already gone. Paying only on delivery protects the buyer, but few suppliers agree to produce with no guarantee at all.
The aim of a good payment agreement is to balance that risk: to give the supplier enough security to start production, without exposing the buyer to losing everything if something goes wrong. That is why the methods and the terms matter so much: in practice, they are your insurance.
The main payment methods
T/T: bank transfer (the most common)
The T/T (Telegraphic Transfer) is the international bank transfer, sent through the SWIFT system. It is the most used method with Chinese suppliers because it is simple, fast and reasonably priced. It is almost always split into instalments (typically a 30% deposit and 70% before shipment) to spread the risk. The point to watch: once sent, it is hard to reverse, which is why vetting the supplier before the transfer is essential.
L/C: letter of credit (the safest for high values)
The letter of credit (L/C) puts the bank in the middle of the deal. The buyer's bank only releases payment to the supplier against presentation of the shipping documents proving the goods were dispatched as agreed. It is the safest option for large orders or a first deal with a supplier, but it carries higher bank charges and demands rigour in the paperwork.
Trade Assurance and paying through Alibaba
For purchases made inside Alibaba.com, Trade Assurance works like an escrow: payment is tied to a contract with agreed deadlines, quantity and quality. If the supplier does not comply, the buyer can open a dispute and ask for a refund. It is real protection, but it only applies to transactions carried out through the platform, not to deals closed outside it.
PayPal, cards and Western Union
For samples and small orders, PayPal and credit cards offer some protection and convenience, but they carry high fees and not every manufacturer accepts them. Western Union should be avoided on commercial orders: it offers no protection and is frequently associated with fraud. For larger volumes, T/T and L/C remain the market standard.
| Method | Buyer protection | Best for |
|---|---|---|
| T/T (bank transfer) | Medium (with a 30/70 split) | Most orders with a vetted supplier |
| L/C (letter of credit) | High | Large orders or a first deal |
| Trade Assurance | High (inside Alibaba) | Purchases through the Alibaba platform |
| PayPal / card | Medium | Samples and small orders |
The 30/70 rule and payment terms
The most common term with Chinese suppliers is a 30% deposit and 70% before shipment. It works like this:
- 30% deposit: paid after the order is confirmed, it frees the supplier to buy raw materials and start production
- 70% balance: paid when the goods are ready and inspected, usually against a copy of the Bill of Lading (BL), the document proving shipment
This model matters because it protects both sides: the supplier does not produce "in the dark", and the buyer does not pay the bulk of the value before knowing the goods exist and have shipped. There are variations (40/60, 50/50, or the balance against documents through a bank), but the principle is always the same: never concentrate the whole payment before production.
Practical tip: whenever possible, make the balance payment conditional on a passed pre-shipment inspection. That way the final payment only goes out after confirming the goods match what was agreed.
How the payment leaves Brazil: the exchange contract
You do not need to hold a dollar account to pay China. The international payment is made by your bank in Brazil through a foreign exchange contract:
- You close the exchange with the bank, paying in reais
- The bank converts to the currency of the deal (usually dollars, sometimes yuan)
- The amount is sent to the supplier via SWIFT
To close the exchange, the bank asks for the import documents (invoice, supplier details, purpose). It is a bureaucratic step, but a routine one, and it is also where the cost of the currency spread and of the IOF enters the total import bill.
How to pay safely and avoid scams
1. Never pay 100% in advance A serious supplier accepts staged terms. Anyone demanding the full amount up front, especially on a first order, is a significant warning sign.
2. Confirm the account belongs to the company, not to an individual Payment should go to a corporate account in the supplier's name. An account in an individual's name, or in a country other than the supplier's, is one of the most classic signs of fraud.
3. Be suspicious of last-minute account changes A common scam is for the supplier's email to be intercepted and the buyer to receive new "bank details" shortly before payment. Always confirm any account change through a second channel (phone, video call).
4. Vet the supplier before transferring Payment security starts before the payment: checking the supplier's registration, track record and standing removes almost all the risk. There is no such thing as a safe payment to an unvetted supplier.
Where BCVN fits into this stage
Much of the unease around payment comes from a single cause: not really knowing the supplier on the other side. When there is a local team in China that checks the company, confirms the bank account is legitimate, follows production and arranges the inspection before the balance is paid, payment stops being a leap in the dark.
After 18 years connecting Brazilian companies to Asian suppliers, BCVN works at exactly that point: supplier vetting, pre-shipment inspection and follow-up of the operation so that every instalment of the payment is backed by a real check rather than by blind trust.
About to make your first payment to a Chinese supplier and want to be sure everything is in order? Talk to our team before you transfer.
Frequently asked questions about paying Chinese suppliers
What is the safest way to pay a Chinese supplier?
It depends on the value and on how much you trust the supplier. For large orders or a first deal, the letter of credit (L/C) is the safest, because the bank only releases payment against presentation of the shipping documents. For smaller orders with suppliers you have already vetted, a bank transfer (T/T) split into a 30% deposit and 70% before shipment is the market standard. Alibaba Trade Assurance also offers protection for purchases made through the platform.
What does paying 30% up front and 70% against the BL mean?
It is the most common payment term with Chinese suppliers. You pay a 30% deposit for the supplier to start production and the remaining 70% when the goods are ready and shipped, usually against a copy of the Bill of Lading (BL), the transport document. This model balances the risk between the two sides and avoids paying 100% in advance.
Can I pay a Chinese supplier by credit card or PayPal?
For samples and small orders, yes: PayPal and cards offer some buyer protection, but they carry high fees and not every manufacturer accepts them. For larger commercial orders, Chinese suppliers prefer a bank transfer (T/T) or a letter of credit, which cost proportionally less and are the standard of international trade.
What is Alibaba Trade Assurance?
It is a buyer protection system offered by Alibaba.com for orders placed inside the platform. Payment is tied to a contract with deadlines and specifications; if the supplier fails to deliver as agreed (delay, quality or quantity), the buyer can open a dispute and request a refund. It works like an escrow, but only applies to transactions carried out through Alibaba.
Do I need a dollar account to pay a supplier in China?
You do not need to hold a dollar account. The international payment is made by your bank in Brazil through a foreign exchange contract: you pay in reais, the bank converts to the supplier's currency (usually dollars, sometimes yuan) and sends it via SWIFT. You do need to present the import documents to close the exchange.
How do you avoid scams when paying Chinese suppliers?
Never pay 100% in advance, confirm that the destination account is in the supplier company's name (not an individual's), be suspicious of last-minute requests to change the account, prefer methods with protection for the first order and vet the supplier before transferring any money. Working with an intermediary that has a local team in China cuts the risk sharply.
BCVN — Brasil China Viagens e Negócios has been connecting Brazilian companies to the best suppliers in China and Asia since 2008. Discover our services in trade intermediation, quality inspection, factory audits and guided business trips to China's main trade fairs.