How to pay a Chinese supplier safely
Short answerpay 30% as a deposit to start production and 70% against the bill of lading, and only after a pre-shipment check. T/T bank transfer is the way most China export orders are paid, and the 30/70 split is the standard structure across sourcing guides. It is cheap and fast. Sourcing guides put a wire at $15 to $50 in bank fees, and the money usually arrives in 1 to 3 business days. But T/T carries no buyer protection. Once the money leaves your account, you cannot pull it back. So the payment method is only half the job. The other half is what you check before you pay: the factory, the bank account name, and the goods themselves. Trade Assurance adds an escrow layer for orders placed and paid through Alibaba.com. A letter of credit puts a bank between you and the supplier and fits orders above roughly $50,000. This guide compares the methods by cost, protection and when each one fits.
T/T bank transfer: how the 30/70 split works
T/T stands for Telegraphic Transfer, a direct bank-to-bank wire over the SWIFT network. It is the dominant way China export orders are paid, because it is fast, cheap and accepted by every factory with a company bank account. The standard structure is 30% deposit before production and 70% balance before shipment. The deposit covers raw materials and gets the order onto the production schedule. The balance is due after production is complete.Pay the balance against a copy of the bill of lading, not against a calendar date. The bill of lading is the shipping line's proof that the goods were loaded, so the factory has to hand the goods to the forwarder before you pay the rest. Sourcing guides also recommend tying the balance to a pre-shipment inspection: write into the order that the balance is released once the inspection confirms the goods match the specification.The risk is simple. T/T offers no buyer protection, no dispute mechanism and no chargeback. If the goods are wrong or never ship, your only route is negotiation or legal action, which is slow and uncertain. That is why the checks before you pay matter more than the payment method itself.Trade Assurance: what it covers and what it does not
Trade Assurance is Alibaba's escrow and dispute service for orders placed and paid through Alibaba.com. Alibaba holds your payment in escrow and releases it to the supplier under the terms written into the order. It covers two failures: the supplier misses the agreed shipping date, or the goods do not match the quality terms in the order. Alibaba says the payment is held until the order is received and confirmed.Read the order terms before you pay. Sourcing guides note that in the standard flow the money is released once shipment is confirmed, which means a quality problem found on arrival is handled through a dispute, not by holding the money back. Alibaba sets a dispute window after delivery, usually 30 days, so inspect the goods as soon as they arrive.Three limits matter. Trade Assurance only applies to orders placed and paid through Alibaba.com with a supplier who carries the badge. If you move the deal to WhatsApp and pay outside the platform, the protection does not apply. It does not cover shipping damage in transit, because the carrier is responsible for that. And it does not prove the factory is real. A supplier can carry the badge and still be a trading company, so check the factory itself before you pay.Letter of credit: when it is worth the cost
A letter of credit, or LC, is a bank instrument. Your bank promises to pay the supplier only when the shipping documents check out against the terms you agreed. The supplier gets paid by the bank, not by you directly, and the bank checks the paperwork before it releases the money.Sourcing guides usually recommend an LC once the order passes roughly $50,000, because that is where the protection is worth the cost. Bank fees commonly run 1 to 3 percent of the order value, and the paperwork takes time on both sides. For a small first order, the fees and the delay cost more than the protection is worth. For a large order with a new supplier, an LC is the strongest protection available.PayPal and cards: fine for samples, weak for production orders
Card payments and PayPal work well for samples and small orders, because they are fast and you can pay in minutes. For a production order, most factories will decline them. The fees are high on a large amount, and the seller carries the chargeback risk, so a factory that accepts PayPal for a $20,000 order is taking on risk it does not need to take.Never pay a factory order as a PayPal friends and family transfer. That route has no buyer protection at all, and it is a common way for scammers to take the money and disappear. If a supplier insists on friends and family for a production order, treat that as a red flag, not as a favour.Payment methods, side by side
| Method | How it works | Buyer protection | Cost | Best for |
|---|---|---|---|---|
| T/T 30/70 | 30% deposit, 70% against bill of lading copy | None | $15 to $50 per wire | Most orders, once the factory is checked |
| T/T 100% upfront | Full payment before production | None | $15 to $50 per wire | Small sample orders only, with a verified supplier |
| Trade Assurance | Alibaba holds the payment in escrow | On-time shipment and quality vs agreed terms | Free to the buyer on qualifying orders | First orders placed on Alibaba.com |
| Letter of credit | Bank pays on shipping documents | Strongest, bank-checked | Commonly 1 to 3% of order value | Orders above roughly $50,000 |
| PayPal / card | Online payment, instant | Consumer-style protection, limited for B2B | High fees on large amounts | Samples and small orders |
| Western Union | Cash pickup, no account needed | None | High fees | Never for a production order |
What never to do
Never pay 100% upfront for a production order. Sourcing guides and trade lawyers agree this is the single biggest cause of unrecoverable losses with Chinese suppliers. The only exception is a small sample order, under $500, with a supplier you have already verified.Never pay a personal bank account. The account name must match the company name on the licence and on the contract. A supplier who asks you to pay a personal account, or a company with a different name, is either hiding something or routing your money somewhere you cannot trace.Never pay new bank details that arrive by email without confirming them by phone or video call. Invoice fraud works by intercepting an email thread and swapping in the scammer's account. Call the supplier on a number you already have and read the account details back to them.Never move an Alibaba.com order off the platform to pay and still expect Trade Assurance. The protection only exists inside the platform's payment flow. The moment you pay outside it, the order does not exist in Alibaba's system.Which method fits your order?
First order, small quantity, supplier found on Alibaba.com: use Trade Assurance, or 30/70 T/T with the balance against the bill of lading and a pre-shipment inspection. Repeat order with a factory you trust: 30/70 T/T is the standard route, and the deposit is the factory's insurance that you will take delivery. Large order above roughly $50,000 with a new supplier: a letter of credit. Samples: card or PayPal, and keep the amount small.Whichever method you choose, the payment is the last step, not the first. The checks come before the money moves.How do I check the supplier before I pay?
Ask for a live video call inside the factory, a business licence, and export records, then get an independent check. Our guide to verifying a Chinese factory before you pay covers the three checks that catch most bad suppliers. Our remote verification ($99 per factory) covers a live video walkthrough, licence and export-record checks, and a written brief in English. For larger orders, on-site inspection starts at $349. Message us on WhatsApp with the product and the supplier name and we will quote.Frequently asked questions
Trade Assurance on Alibaba.com, or 30/70 T/T with the balance paid against the bill of lading after a pre-shipment inspection. Both keep leverage with you until the goods are made and checked.
Yes. It is the most common payment structure in China export trade. Pay the deposit to start production and the balance before shipment, ideally against a copy of the bill of lading and after a pre-shipment inspection, not on a fixed date.
For samples and small orders, sometimes. For production orders, most factories decline PayPal because of the fees and the chargeback risk. Never pay a production order as a friends and family transfer, because that has no buyer protection at all.
Clusters in this guide
Evidence BDaily Goods
Yiwu Small Commodities Cluster
Wholesale sourcing across all small-commodity categoriesJinhua, Zhejiang · Small Commodities
Evidence BBeauty & Personal Care
Xuchang Wigs Cluster
Human-hair and synthetic wigs and hair extensionsXuchang, Henan · Wigs & hair products
Evidence BJewelry
Danyang Glasses Cluster
Lenses and finished eyewearZhenjiang, Jiangsu · Glasses & lenses
Evidence BJewelry
Zhuji Pearls Cluster
Freshwater pearl raw material and finished pearlsShaoxing, Zhejiang · Pearls
Evidence BJewelry
Shenzhen Shuibei Gold Jewelry Cluster
Gold, K-gold and jewelry wholesaleShenzhen, Guangdong · Gold jewelry
Evidence BToys, Sports & Culture