How to Pay Chinese Suppliers: A Guide for Malaysian SMEs
Last update:
anja
Clare Shi
Author
Key takeaways
If you’re doing research on how to source wholesale from 1688.com, you may have a few questions such as:
If you’re doing research on how to source wholesale from 1688.com, you may have a few questions such as:
If you’re doing research on how to source wholesale from 1688.com, you may have a few questions such as:
Why choosing between the right payment options matters
For Malaysian SMEs, knowing how to pay in China is crucial when sourcing affordable, high-quality goods. Using the wrong method can lead to high costs, delays, or disputes. Whether you’re a business owner, a foreigner paying in China, or even a tourist learning how to pay in China, your choice depends on order size, supplier trust, and convenience.
This guide compares popular payment methods to send money to China, currencies, risks, and costs, and explains how services like WorldFirst can simplify the process.
Common currencies: CNY vs CNH vs USD
Before diving into payment methods, it’s important to understand the currency landscape:
- CNY (Chinese Yuan): The official currency of Mainland China. Foreign buyers typically cannot pay directly to CNY bank accounts unless specific settlement arrangements are made.
- CNH (Offshore RMB): A version of the Chinese Yuan designed for cross-border payments. CNH is regulated offshore and ideal for international businesses.
- USD (US Dollar): Still widely accepted by Chinese suppliers, though may carry higher FX conversion costs.
Tip: If you’re trying to import wholesale products from China or setting up a viable cross-border payment system, many Malaysian SMEs benefit from negotiating in CNH to reduce FX risk and simplify supplier-side processing.
Quick summary: Which payment method suits my business?
| Payment Method | Best for |
|---|---|
| Multicurrency Business Accounts | Regular importers needing CNH/USD payments |
| Telegraphic Transfer (TT) | Larger orders with trusted suppliers |
| Letter of Credit | High-value, high-trust transactions |
| Alibaba Trade Assurance | New suppliers on Alibaba platform |
| PayPal | Samples and small orders |
| Western Union | Urgent, small personal remittances |
| Sourcing Agencies | Businesses needing local QC, logistics and payment management |
| Cash | On-site wholesale buying |
| Credit/Debit Cards | Tech-related purchases and smaller B2B orders |
| WeChat Pay / Alipay | In-country payments to freelancers and small suppliers |
10 ways to pay Chinese suppliers (with pros, cons, and acceptance)
1. Multi-currency cross-border transfers
Many multi-currency accounts in Malaysia, including WorldFirst allow Malaysian SMEs to hold, manage, and pay in CNH or USD. Payments go directly to the supplier’s offshore CNH account, avoiding unnecessary intermediaries.
- Pros: Low FX rates, fast processing, excellent for frequent or high-volume importers
- Cons: The Supplier must have CNH receiving account.
2. International Telegraphic Transfer (T/T)
Also known as bank transfer to China, is still one of the most commonly used methods. Typically used in two parts: a 30% deposit before production, and 70% upon shipment.
- Pros: Widely accepted, bank-backed
- Cons: High fees, multiple intermediaries, slow (3–5 days), exchange rate markup
3. Letters of Credit (LC)
For high-value orders (>USD 50,000), LCs provide mutual protection. Your bank guarantees payment if all agreed terms are met.
- Pros: Trusted by large factories and trading houses
- Cons: Expensive, complex paperwork, not ideal for small businesses
4. Alibaba Trade Assurance / Alipay Escrow
Payment is held by Alibaba until goods are delivered and confirmed.
- Pros: Buyer protection for purchases on Alibaba
- Cons: Limited to Alibaba platform, 5%+ fee often passed on to buyer
5. PayPal
Quick and convenient for samples or small orders. Increasingly accepted by consumer goods and electronics suppliers.
- Pros: Easy setup, fast payments
- Cons: High transaction + FX fees, limited buyer protection for business purchases
6. Western Union
Fast and easy, but offers no protection. Generally used for small personal remittances.
- Pros: Accepted by some suppliers
- Cons: High markups, zero recourse if fraud occurs
7. Sourcing agencies
Some SMEs work through third-party sourcing agents in China, who can pay suppliers locally using CNY or other accepted methods.
- Pros: Local risk management, handles logistics and QC
- Cons: Additional cost (~5–10%), dependent on agent integrity
8. Cash
Sometimes used in face-to-face transactions, especially in wholesale markets.
- Pros: Immediate settlement, potential cash discounts
- Cons: High risk, not scalable or traceable
9. Credit/Debit Cards
A few suppliers accept card payments (especially for software/hardware components).
- Pros: Buyer-side protection, convenient
- Cons: Very high fees, chargeback risk for seller, low acceptance
10. WeChat Pay / Alipay (Domestic use)
Can be used if you’re physically in China or dealing with freelancers. Must be linked to a local Chinese bank account or wallet.
- Pros: Fast, low-cost for in-country payments
- Cons: Limited to personal transactions; not suitable for larger B2B trade
What to consider before choosing a payment method
- Supplier relationship: New supplier? Use escrow or partial payments. Trusted supplier? Consider TT or WorldFirst.
- Order size: For small orders, PayPal or escrow may suffice. For bulk or repeat orders, CNH payments offer long-term efficiency.
- Currency preference: Always confirm the quote currency and payment expectations early.
- Documentation needs: LCs and bank wires often require commercial invoices and packing lists.
- Payment timeline: Some methods (e.g., LCs) require longer lead times.
How to pay Chinese suppliers using WorldFirst
WorldFirst is ideal for SMEs looking to make cost-effective, reliable payments to Chinese suppliers.
Step-by-step:
1. Add your supplier’s CNH account under “Payees” > “Add new payee” > “Third-party account” (choose personal/corporate)
2. Choose CNH as the receiving currency and fill in the account details
3. Declare nature of services (e.g., OEM production)
4. Complete SMS or Authy verification to finalise payee setup
5. Go to “Payments” > “Send & Withdraw” and enter the payment amount
6. Schedule your payment (now or later)
7. Confirm and pay.
That’s it! With WorldFirst, you can make secure and usually make same-day payments to Chinese suppliers in CNH or USD. This ensures you can transfer money to China without hassle, while complying with Mainland regulations.
Save more on every transaction with the World Card
WorldFirst also offers the World Card — a multi-currency business card that lets you:
- Pay in 150+ currencies across 210 countries and territories
- Earn up to 0% cashback on all eligible business expenses
- Avoid FX fees on 10 currency balances , when spending from your CNH or USD balance
- Control team spending with multiple cards and real-time limits
Whether you’re paying for supplier invoices, ads, logistics, or e-commerce website fees, the World Card helps you track, save, and scale.
Start paying suppliers smarter
At WorldFirst, we make doing global business easy.
Unlock competitive FX rates without hidden margins, schedule multiple transfers, track expenditure, and more, all from a convenient dashboard.
Ready to grow globally? Register for a WorldFirst Account today.
Frequently Asked Questions (FAQ)
1. How to pay in China as a foreigner?
Foreigners can pay in China with WeChat Pay or Alipay. They can link an international credit card or use special “Tour Pass” wallets. For larger trade payments, Malaysian SMEs often use WorldFirst to transfer CNH or USD directly to suppliers. Cash is less common and not widely accepted.
2. How to pay in China as a tourist?
Tourists in China typically use Alipay or WeChat Pay. Alipay’s “Tour Pass” lets visitors add money to a temporary wallet with an international card.
WeChat Pay is slowly adding support for foreign cards. These digital wallets are accepted almost everywhere, from taxis to restaurants. Carry some cash (RMB) as backup for smaller towns or markets.
3. How to use WeChat Pay in China?
To use WeChat Pay in China, download the WeChat app, complete real-name verification, and link a bank card. For foreigners, some cards (Visa, Mastercard) work for wallet top-ups, though functionality may have limitations. Many businesses widely accept WeChat Pay for daily purchases, and tourists often find it to be the easiest method.
4. Do I have to pay VAT on goods from China?
Yes. Malaysian SMEs that import goods from China usually pay import duties and VAT or GST. This depends on the HS code of the product. VAT rates vary by product category. Always confirm with Royal Malaysian Customs for the latest rules, as VAT obligations affect landed costs and pricing strategy.
Continue reading
Subscribe
The Weekly Dispatch
Get the latest news and event invites. Signup for our weekly update from the worlds of fashion, design, and tech.
