Making Payments to China

Secure and efficient ways of paying your Chinese Suppliers
Since the opening of trade channels in 1978 China has radically transformed its banking system in order to facilitate trade. China now has a national banking system that operates as well in terms of convenience and security as any western system for most business users.

The options for transferring payments to China include; Letter of Credit, TT (Telegraphic Transfer), Money Transfer, Credit Card & of course Cash

All reputable suppliers in China will have a bank account which can accept TTs from overseas and most will also be familiar with the operation of a letter of credit.

A Letter of Credit is a mechanism arranged through your bank in Ireland which allows the Chinese supplier to obtain payment from their bank in China on fulfilment of certain conditions - usually the shipment of the ordered goods.

The Issuing Bank and Advising Bank charge for the arrangement of a letter of credit, these vary from bank to bank and can be negotiated.

Click here for more on Arranging a Letter of Credit

Telegraphic Transfers (TTs) are the best alternative if a letter of credit cannot be arranged.

The procedure and fee for arranging TTs vary from bank to bank and can depend on the size of the transaction in question. Some banks insist that a visit to the branch is required to effect payment while most will allow you to set up through their e-banking services. We particularly like the National Irish Bank on-line payment service which we've found to be the most efficient and cost-effective.

When processing a TT pay particular attention to the payee’s name & address and the currency of the payment to avoid delays. You should also note that Chinese banks do not use IBANs, rather they use SWIFT codes.

Contact your bank to negotiate the best exchange rate and charging structure if you will be making frequent payments to China.

Cheques drawn on Irish banks are expensive and difficult to encash in China. Therefore they are almost never acceptable as a method of payment.

We do not recommend that Irish buyers use either money transfer or credit card as methods of payment for commercial transactions. When using these methods it is not necessary to identify the organisation as payee so you cannot be sure who you are sending the payment to. These methods are also relatively expensive in comparison to the other options.

Cash is to be avoided for obvious reasons– security, lack of traceability and of course the need for physical presence in China really means that this is out for most transactions.

Contact Us for more information on making payments to China.