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Most US importers pay Chinese suppliers by international wire transfer (TT), typically a 30% deposit before production and 70% before shipment. This guide compares TT, Letters of Credit, and Alibaba Trade Assurance, explains the US banking rules (BSA reporting, OFAC screening) that apply to large international transfers, and walks through a practical checklist for avoiding the wire fraud that costs importers the most money.
In short: Most US importers pay Chinese suppliers by international wire transfer (TT), usually in two instalments — a 30% deposit before production and 70% before shipment. Letters of Credit (LC) suit large first orders where you want a bank to guarantee payment against shipping documents, while Alibaba Trade Assurance works well for smaller, platform-based orders. Whichever method you choose, verify the supplier's bank details by phone before every wire — a compromised email account, not a hacked bank, is how nearly every payment scam starts.
Last updated: August 24, 2026
How do US importers usually pay Chinese suppliers?
The standard method is a telegraphic transfer (TT) — an international bank wire sent via SWIFT from your US bank to the supplier's Chinese bank account. It's fast, accepted by every factory, and cheaper than most alternatives once you have an established relationship.
The typical structure is a 30% deposit once you confirm the order, with the remaining 70% due once the supplier confirms goods are ready to ship. Tying that balance payment to your own pre-shipment inspection, rather than just the factory's word, is one of the simplest ways to reduce risk regardless of payment method.
TT vs Letter of Credit vs Alibaba Trade Assurance: which should you use?
| Method | Best for | Buyer protection | Typical cost |
|---|---|---|---|
| Telegraphic Transfer (TT) | Repeat orders, established suppliers | Low — funds are hard to recover once sent | Low bank fee ($15-45 per wire) |
| Letter of Credit (LC) | Large first-time orders (typically over $25,000) | High — bank pays only against correct shipping documents | 0.5-2% of order value in bank fees |
| Alibaba Trade Assurance | Smaller Alibaba-platform orders | Medium — Alibaba mediates disputes | Included in Alibaba order, no extra fee |
What US banking rules apply when you wire money to China?
US banks apply Bank Secrecy Act (BSA) reporting requirements to international wires, and larger transfers can trigger extra verification questions from your bank's compliance team — that's standard practice, not a sign anything is wrong. Banks and payment processors also screen transfers against OFAC sanctions lists, so make sure the beneficiary company name on your wire matches its registered business licence exactly, since a mismatch is a common cause of delayed or frozen transfers.
Most banks also cap same-day wire limits for new international payees. If you're sending a large balance payment to a new supplier, call your bank a few days ahead to confirm their verification process and limits so funds arrive when the factory expects them.
How do you avoid wire fraud when paying a Chinese supplier?
Wire fraud against importers almost always starts with a compromised email account, not a hacked bank. A scammer watches a real order conversation, then sends "updated" bank details right before a payment is due.
- Confirm any bank detail change by phone, using a number you already have on file — never one provided in the email that raised the flag.
- Match the account name to the supplier's business licence exactly, not just a similar-looking name.
- Treat urgency as a red flag. "Pay today or lose the production slot" is a classic pressure tactic.
- Send a small test transfer first to a new account before wiring a large balance.
- Keep every previous invoice and bank detail on file so you have something to compare against if something changes.
Worked example: paying a $15,000 order in two instalments
| Item | Amount |
|---|---|
| Order value (FOB) | $15,000 |
| Deposit (30%, on order confirmation) | $4,500 |
| Balance (70%, before shipment) | $10,500 |
| Bank wire fees (2 transfers, approx.) | $40-90 |
| Total paid to supplier | ~$15,000 + wire fees |
FAQ
Is it safe to wire money directly to a Chinese supplier?
Yes, provided you've independently verified the supplier and their bank details — ideally by phone, before your first payment. TT is safe in practice for the large majority of established trading relationships; the risk sits in verification, not the payment method itself.
What percentage deposit is normal when ordering from China?
30% deposit with 70% balance before shipment is the most common structure. Some factories accept 20/80, and established relationships sometimes move to net payment terms after several successful orders.
Should I use a Letter of Credit for my first order?
For large first orders (roughly $25,000 and above) with a supplier you haven't worked with before, an LC gives real protection because the bank only releases payment against correct shipping documents. For smaller or repeat orders, the bank fees usually outweigh the benefit.
Can I pay a Chinese supplier with a credit card or PayPal?
Some smaller suppliers accept PayPal or cards, usually at a surcharge, and mainly for samples or very small orders. For full production orders, TT, LC, or Alibaba Trade Assurance are the standard, more cost-effective options.
What should I do if I've already wired money to the wrong account?
Contact your bank immediately and request a SWIFT recall — banks can sometimes intercept a wire within the first 24-48 hours. Report it to the FTC and your bank's fraud team without delay; speed matters more than anything else here.
How Epic Sourcing helps
Epic Sourcing's bilingual teams on the ground in China and Vietnam verify supplier bank details and business licences before any client wires money, and structure milestone-based payment terms as part of every project. If you want a second set of eyes before your next payment to a Chinese supplier, get in touch with Epic Sourcing — no pressure, no obligation.
Related reading: How to Spot a Fake China Sourcing Agent | Is Alibaba Safe? The Complete US Importer's Guide | Import Duty from China to the USA: 2026 Rates & Worked Examples
Sourcing or shipping into another market? See our 2026 guides on customs clearance from China to the UAE and dropshipping from China to Singapore.