I have some really good news to share with you—some REALLY good news! I have been waiting for this moment for years now and it has FINALLY become a reality. Transferwise is now supporting USD payments to China! BINGO!
This means we no longer have to overpay our banks for sending USD to our suppliers in China, and don’t have to use shady online currency exchange places, etc. It’s all gone, forever! We can now make simple, quick and cheap international USD payments to Chinese suppliers (and many other countries), and all for a very low fee with guaranteed currency exchange market rates!
If you have been importing your products from China, you will know that banks can charge £20 or even £30 for international bank transfers to China—even if the amount is very low, like £1000. Plus, they never use actual market rates for exchanging GBP to USD (the market rate is basically the BEST exchange rate you can get, which gives you most dollars for your pounds). That means that you’re overpaying twice:
1) The high fee for making the payment
2) The bad currency conversion rate (which can be as much as a 2% difference)
Combining these two, you can actually lose 5% (or more!) on a GBP to USD conversion and transfer to China, which is SHOCKING! Obviously, the more money you send, the lower the percentage because the transfer fee per £1 decreases as the sum increases. Still, why pay even 3% to a bank when you can put that money in your pocket? Exactly!
As small business owners, we are always looking ways to save money and efficiently cut costs, and bank fees and transfers are an area where you can cut costs with absolutely no impact on your product quality or customer service. You should never be overpaying on fees and you should always seek out the cheapest, most efficient cost-saving processes for services that don’t affect your customers.
Anyways, I’m sure you can sense how excited I am about this—because I am! I have been waiting for this for years and now it’s reality. And yes, I know that there are some other online companies that have been offering this service already, but I’m so happy that it is possible to do it via Transferwise now because that’s where I have my accounts and that’s the company I trust 100%. So, let’s take a closer look at how the whole process works.
How to send USD Payments to Chinese Suppliers using a Transferwise Borderless Account!
So, the first thing you will need is a Transferwise Borderless Business account. The account itself is free and very easy to set up. Just make sure you’re using your REAL details when creating your account as you will have to verify your identity. Transferwise works under FCA regulations, so this is not the place to joke around! Just use your real details and don’t try to do anything shady. By that, I mean you should also inform your accountant (if you have one) that you have opened this new account so that it is properly recorded on your books.
Click on the “Send Money” button to initiate the process:
In the “Recipient Gets” block, select USD from the currency list and the amount of money you would like to send. This amount will be shown on the pro forma invoice you have received from your Chinese supplier:
What’s also interesting is that Transferwise shows exactly how much you save with this process compared to some high street banks.
If you click on the “Compare Price” button, you will see the exact numbers on your savings:
It may not be that much ($30-$40 or so) on a $1000 payment, but it is still more than 3% of the transaction value! If you try some bigger numbers, like £10k or £20k, you will see that the difference is HUGE! Hundreds of pounds instantly saved!
The transfer fee is usually fixed at around the £20 mark (with banks), but the biggest difference comes from the exchange rate.
You see, banks are NOT offering you the best possible market exchange rate—far from it! They add a huge markup on the exchange rate because that’s how they make their profit! That’s how they can afford all their overheads, executive bonuses, private jets, and everything else that comes with traditional, corporate banking firms:
Transferwise, on the other hand, gives us REAL market rates. You can easily verify this by comparing the amount of USD you get on your transfer with a currency exchange rate website, like xe.com. The rate is almost identical (there’s always a small spread involved, but that’s normal):
So, the biggest savings when doing international money transfers via Transferwise.com comes from the currency exchange rate, not the actual transfer fee, which they also charge. In fact, on a £10k payment, Transferwise will charge MORE than a high street bank; roughly £40 versus £20:
This is because Transferwise is NOT using a fixed transfer fee structure here. The transfer fee depends on the amount of money you send, which actually makes a lot of sense, right? Why should we pay the exact same £20 fee on a £1000 transfer and a £20k transfer? It should correlate with the amount we send, and that’s exactly what Transferwise does.
The fee is roughly £4 per every £1000 pounds (which is just 0.04%), and you can easily see the exact rates by changing the numbers in the “You Send” block.
For new Amazon sellers, this is a much better price structure as you will usually start out with small importing deals worth just a few thousand pounds, sometimes even less. You will pay less in transfer fees compared to high street banks, not to mention the additional savings you make on the currency exchange rate.
Once you have entered the correct amount that the end recipient should get, click on the “Continue” button and, on the next screen, select who will receive the money. With most Amazon (and eBay) sellers, you will be sending money to the company’s bank account in China, so you should select the last option: Business or Charity.
IMPORTANT!!! I have repeated this many, many times on my blog, but will do it one more time: NEVER send money to personal bank accounts in China, no matter what your supplier says! Usually, they will come up with an excuse that there’s a problem with the company’s bank account and that they have to temporarily use the boss’s personal account, etc.
Don’t believe any of that for a second—just don’t do it! There’s a VERY high chance that they’re playing you. It’s highly likely that the employees of the company you’re dealing with are trying to scam you, or the supplier itself is all scam altogether. So, please, only send money to COMPANY bank accounts, and the name of the bank account should match the name of the company you’re dealing with (unless they’re using a middleman/trading company for the deal).
Going back to the transfer, simply enter all the details that are required there. In “Bank Account Details”, select China from the country list and enter the SWIFT code and account number that your supplier provided on the pro forma invoice:
You will also get a message that there’s an additional fixed fee of $2 applied to all USD payments going to locations outside the US; this is because Transferwise has to use the SWIFT system for these payments.
They also note that the recipient (your supplier) “may” also face additional charges at their end, but you really don’t have to worry about this. If your suppliers have given you their bank details, they know how international bank transfers work and they will already be aware of any additional fees that their bank might charge for these transfers.
Once you have entered all the details, click on the “Confirm” button. On the next page, you can review the transfer before you finalise it by clicking on the “Confirm and Continue” button. In the reference block, you will want to enter the pro forma invoice number:
On the last step, you simply need to fund the transaction by adding money to your Transferwise account to cover this international payment to your supplier in China.
If you’re selling on Amazon already, I strongly recommend that you replace your current bank account with the Transferwise account details on the Amazon platform. This way, Amazon pays you directly into your Transferwise account and you won’t have to move money around as you will always have funds already in your Transferwise account to pay your suppliers in China.
But if you’re starting from nothing, you will have to add funds to your account. You can fund this transaction via several methods:
- Bank transfer
- Debit card
- Credit card
- Apple Pay
- SWIFT Transfer
The local bank transfer is FREE to use, so I recommend you go with that. Alternatively, you could use your card, but there will always be a fee involved for using card transactions like these.
Once you have selected your payment method, click on the “Continue to Payment” button.
On the last step, you’re basically getting the details for the bank transfer or, in the case of cards, entering your card details so that Transferwise can charge your card and fund this transaction.
And that’s it! This is how you can quickly and cheaply send payments to your suppliers in China using the Transferwise Borderless account! I hope you can see how easy this is. With Transferwise, there’s simply no more excuses for continuing to pay outrageous fees to high street banks!
For years now, I have been using Transferwise for payments in Europe and the US, but now I will use it for all payments to Chinese suppliers too. And this new feature is actually not limited to China alone—it works for other countries, like Hong Kong, which is a popular location for many electronics suppliers.
We don’t yet have support for payments to India or Pakistan, but I’m sure Transferwise is working on that too. By the way, you can already make payments to these countries in their local currencies, that’s all fine and already available. It’s just that the USD option is not yet available.
Another important point I want to bring up is that Transferwise is NOT PayPal. It works just like a “normal” bank when it comes to payment safety issues. There is no way to reverse a payment via Transferwise; once the money’s gone, it’s gone for good. Just like with any other bank transfer, there are no special payment protection plans in place (like you have with PayPal, for example).
So, please do not send money to bad suppliers or scammers in China (or anywhere else) via Transferwise and then blame Transferwise for that. They won’t be able to help you. They just provide you with a service to send cheap, fast international bank transfers.
You should always verify your suppliers, do an inspection on them if needed, before you send any money via bank transfer. And, of course, you can also use a bank transfer to fund a trade assurance order. Transferwise can work for that situation too.
And that’s it for today! I have tried to include the most important information you need to know about making USD payments to your suppliers in China in this blog post. I really hope that this news reaches as many Amazon/eBay sellers as possible as I would hate to see them continue to pay extortionate high street banking fees when such a cheap alternative is easily available.
Click here to get started right now and say goodbye to high banking fees for international money transfers!