While sending money to China is undoubtedly simpler now than it was in the past, there are still many obstacles to overcome in order to ensure both safety and cost-effectiveness. But how to send money to China?
There are numerous options available if you’re looking for a way to send money to China. such as Neat, bank or wire transfers, and third-party sourcing firms.
The ease of the transaction, speed, cost, and transparency of the process must all be taken into account when determining the best method for sending money to China.
Discover which payment option is most suitable for you by reading the information below and learning more about how to make payments in China.
How To Send Money To China?
Neat offers corporate cards and business accounts that are designed for expansion.
You can use the service to send and receive money internationally, incorporate your business in Hong Kong, and manage your company’s finances. The multi-currency account from Neat enables you to store and manage US dollars, Hong Kong dollars, euros, and British pounds.
Additionally, Neat enables you to send payments at affordable rates to more than 35 nations, including China.
Users can send payments to China using Neat in USD and CNY.
Create a Neat account to get started. Then, all you’ll require to send money to China is the recipients:
- Bank name
- Account number
- SWIFT code
- Account holder name (in English)
For security reasons, you’ll also require a supporting document to confirm the purpose of the transfer. This document, typically an invoice, should:
- Specify the goods or services provided
- Be signed and certified by the recipient
- Be a PDF, JPG, or PNG file
Additionally, you can convert CNY payments received into your Neat account into other currencies without paying additional transfer or exchange costs.
The Chinese yuan is one of the many currencies that you can accept payments in using Neat. Nevertheless, depending on which wallet receives the money, the funds will automatically be converted into HKD, GBP, or EUR.
When a transaction between a buyer and seller is facilitated by a third party, that person is referred to as the “escrow” party.
Here’s how it goes: The buyer will send the money to the escrow company before the supplier starts working. The escrow service will transfer the funds to the supplier after the buyer receives the goods and is happy with them. The escrow service will serve as a mediator in the event of a dispute and assist both parties in reaching a mutually beneficial resolution.
As a result, escrow services provide a very secure method of sending money to China. However, when a dispute does arise, it may be difficult to find a satisfactory solution.
Additionally, it is uncommon to use this method of payment for cross-border transactions. However, you might be able to use Alipay Escrow to pay if you’re sourcing goods or services through Alibaba.
Escrow is not inexpensive either.
Fees usually amount to 5% of the transaction. Even though the supplier is frequently responsible for paying these fees, they will almost certainly be passed along to customers in the form of price increases.
Escrow is practical for smaller transactions with new suppliers who you don’t yet have a strong relationship with, in conclusion. However, because of the extra expenses involved and the potential for a lengthy escrow period, they are not recommended for larger transactions.
3. Letters Of Credit (LCS)
Banks will issue letters of credit (also known as LCs) as a guarantee that suppliers will be paid after the terms and conditions of the contract are fulfilled.
International traders and larger suppliers are typically happy to accept LCs; in fact, many will insist on one. Simply put, LCs lower the risk for suppliers by guaranteeing payment from the buyer.
But are LCs beneficial for buyers? In short, yes. LCs can aid in ensuring that suppliers keep their word and deliver what was agreed.
These factors make LCs very popular for transactions that total more than $50,000. Due to the high fees, convoluted paperwork, and language barriers associated with LCs, many small and medium-sized suppliers are hesitant to accept them.
If you choose to use LCs to send money to China, be sure to get expert advice and direction before starting.
4. Third-party Sourcing Agencies
If you make purchases through a local Chinese sourcing agency, escrow acceptance for international payments is more common in China.
These sourcing organizations facilitate the exchange of funds, simplify communication, and lower risk for all parties. Defective or damaged goods can therefore be rejected by the agency, which will then reimburse the buyer for the escrow payment.
Naturally, these services significantly raise the cost of sending money to China and frequently charge higher fees than the standard 5% escrow fee.
So once more, for smaller transactions with new suppliers, third-party sourcing companies may be a good option. But for larger transactions, this method of sending money to China is unfavorable due to the fees.
5. Bank Or Wire Transfers (Via Swift)
It has been a long time since wire transfers first appeared.
They are widely used and frequently the best option for businesses.
To reliably transfer money between accounts, the biggest and most reputable international banks in China and every other nation use the SWIFT standard international code system.
- Reliability: High
- Transfer Fee: $35-45 along with currency conversion fees
- Setup Difficulty: Low
- Speed: Relatively slow to medium (A few days to a few weeks)
For small, frequent transactions, wire transfers are obviously not an option with such a comparatively high flat rate.
Paypal, for example, is the best option for that, as we all know.
Nevertheless, some traditional vendors might not accept a novel or uncommon transfer method.
An electronic transfer may then be your best or only option.
You’ll see that the reliability indicator above reads “High,” not “Very High.”
This only applies to China and a few other nations with equally strict laws against foreign investment and money laundering.
There are times when a wire transfer to a bank in China will be halted and scrutinized.
As a result, the wire might be delayed for a few days or even weeks.
It’s not very common, but because it can happen, we advise keeping it in mind
6. Western Union
Western Union has been around for a while and is still a practical way to send money to China.
Go to a grocery store or post office that accepts Western Union payments if you want to use Western Union to send money to China. You’ll be given a control number when you pay the cashier and asked to specify who the payment is for. Giving the number to your supplier will enable them to pick up the funds from a Western Union branch in China.
Given that transfers can happen incredibly quickly, this is one of the best ways to send money to China if you’re in a hurry. Additionally, this method of payment is popular with suppliers because it is simple, quick, and affordable—at least for them.
Buyers must pay a high price to use Western Union, though. Although the fees might appear low, the service earns its money through pricey markups on exchange rates. Additionally, it is a fairly risky method of sending money because there is little you can do to get your money back if a supplier does not fulfill their commitment.
To sum up, Western Union may be a good choice for making small, private payments. For business transactions, however, it’s quite costly and risky.
Do you require making a significant one-time transaction to China for a relative or business partner?
If so, Wise is the simplest and fastest method of transaction.
Comparing it to, say, Western Union, TransferWise also offers better exchange rates.
How much does it cost to send money through TransferWise to China?
- Exchange rate: Best Available; No Spread
- Transfer Fee: 2.95 USD + 1.19% of your total amount
- Extra Fees For: Credit and debit cards; bank wire.
How does it work?
- Log in after creating an online account.
- Enter the recipient’s information as well as the amount you wish to transfer.
- Use your bank account, credit card, or debit card to pay TransferWise.
- Your money will be sent on your behalf by TransferWise.
Within a few business days, your designated recipient will receive the funds in Chinese Yuan (renminbi).
PayPal is one of the most used tools for transferring smaller sums of money worldwide because of its friendly user interface and high level of overall credibility.
- Reliability: Very High
- Transfer Fee: 2.9% + currency altering fees
- Setup Difficulty: Low
- Speed: Fast
Due to the PayPal platform’s robust Chinese language interface, it has a respectable user base in China.
The ability to send money anywhere right from your smartphone is hard to ignore, despite the fact that it is fairly expensive to use in China.
In addition to a 2.9% transfer fee, PayPal’s biggest drawback is its currency conversion fees.
Due to fees like these that can quickly add up over time, larger companies that conduct numerous daily transactions find Paypal to be a less appealing option.
Unsurprisingly, vendors everywhere are more than happy to accept cash, and vendors in China are no exception. In fact, many Chinese vendors will give customers a discount if they pay with cash.
Cash isn’t an option, though, and even if it were, it’s probably the riskiest way to pay for a transaction when it involves another country. There is not much protection if something goes wrong, similar to Western Union.
Furthermore, exchange rate markups and fees are still applicable when paying with cash.
So even though paying with cash is a common practice in China, it’s risky and inconvenient for buyers from other countries.
10. International Credit Or Debit Cards
Using your credit or debit card, you can send money to China. Similar to PayPal, buyers can withdraw money after receiving the goods or services, so the risks for the supplier are extremely high.
When exchange rate markups are taken into account, credit and debit card fees are frequently extremely high as well.
In general, sending money to China through international credit and debit card transactions is unpopular and expensive. However, you can always use your credit or debit card if you’re in a pinch.
Tips For Sending Money To China
You’ll observe that there are numerous ways to transfer your money if you want to send money to China. You’ll find that some, though, are more swiftly, safely, and affordably than others. China is one of the top recipients of remittances, according to the World Bank. For your money transfers to China, consider the following seven suggestions to help you choose the most affordable, quick, and secure option:
Use An Online Money Transfer Service
Always look into the experts in online money transfers when considering sending money to China. They will typically be less expensive because they have lower overhead (no stores or agents to pay for), offering better exchange rates and lower fees than a bank or High street-based money sender. Simple and secure, sending money online only requires the creation of an account to obtain a live quote and make a payment using a credit or debit card, or in some cases, a cash voucher or local bank transfer.
Use A Registered Payments Institution
Always use a business that is registered as a payments institution to conduct transactions. This indicates that they are FCA-registered in the UK. Because of the European Directive 2007/64EC on the harmonization of regulatory institutions for payments within the European Union, their registration is now valid throughout the entire EU.
Look For Refund Policy For Unexpected Expenses
Some middle banks may charge you extra fees when you send money to China. Always pick a school that guarantees you’ll get your money back in full for these unforeseen costs. to learn more about Xendpay’s No Surprises Guarantee.
Check The Chinese Currency Rules
It is crucial to be aware of the various limitations placed on receiving money in China. Always confirm with your recipient in China the currency in which he or she is permitted to accept transfers before sending a transfer. to learn more about Chinese restrictions.
Compare The Exchange Rates As Well As The Transfer Fees
Because the exchange rate will have an impact on how much money your recipient ultimately receives, you should search for a service that offers a competitive exchange rate. Also, keep in mind that larger amounts typically result in a better exchange rate. Money transfers are the source of income for all money transfer companies. Most of the time, this fee is a set sum plus a profit margin on the exchange rate. The margin at many money transfer offices can range from 10% to 15% of the amount you want to send to China.
Pay By Local Bank Transfer Or Use The Cheapest Payment Method
You should be aware that depending on the payment method you choose, there may occasionally be additional expenses. A commission of 1.5%–3%, for instance, will be charged if you pay with a credit card. However, you can avoid these extra fees if you pay with a UK debit card. The best method of sending money to China is through a local bank transfer, though. Make sure your supplier offers that choice in your nation.
Send Money To A Bank Account, Not For Cash Collection
You should consider how you want your recipient to receive the money in China before sending it. Sending money to a cash collection point typically costs more than sending it directly to a bank account because the payout location will charge you a fee. However, the most cost-effective option for you is to pay into the Chinese person’s bank account if they have one. A money transfer company can send money to any bank account worldwide if it is a member of the SWIFT network.
Read More: Are Companies Leaving China And Why?