• How to Make a Telegraphic Transfer (T/T) to a Chinese Supplier

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    Telegraphic Transfer (T/T), which commonly called ‘Wire transfer’ is still the most common payment method, when transferring money internationally.

    Yet, making Telegraphic Transfer payments is not without risk. In fact, the risks involved are far bigger than most importers might think.

    In this article, we explain why a slight misspelling could result in tens of thousands of dollars being withheld by the receiving bank – and why you should never pay privately held bank accounts.

    Keep reading, and learn how you can avoid payment delays, scams, and other Telegraphic Transfer related issues.

    1. Get the beneficiary name, address and other account details right

    When writing money to your supplier’s bank account, you need to make sure that all beneficiary and bank details are correctly, and fully filled in.

    If, for example, the beneficiary name is not correctly typed in, the money will be withheld by the Chinese bank – and finally returned back to you.

    This is indeed a good security measure, but this will cost you at least 2 to 3 weeks. In addition, you don’t get the bank transaction charges from neither your bank or the suppliers. But, that quite irrelevant, in comparison to what a month long delay could cost your business.

    So, why is this even an issue to begin with?

    First, Chinese company names tend to be long.

    In fact, they tend to be too long for most internet banking systems. As a result, new buyers tend type in as many characters as the system allows them, and leave the rest for the receiving bank to figure out.

    For example, ‘Shenzhen Feihang Optoelectronics Co., Limited’ is shortened into ‘ Shenzhen Feihang Optoelectr…’ However, the result is almost always a rejected Telegraphic transfer transaction.

    With this in mind, I advise you to do the following:

    a. Never shorten the company name, even if it’s too long for the ‘beneficiary name’ field. Instead, type in the remaining part in the ‘beneficiary address’ field.

    b. Check if the suppliers registered ‘beneficiary address’ is registered with the bank. Many companies don’t bother to notify their bank when they change address.


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    2. Make sure you pay the right company

    The risk of payment frauds are always present when transferring money internationally. As such, you must always check if the bank account beneficiary name is matching the name of the company, you buy the products from.

    The problem is that there are various reasons, both legitimate and illegitimate, for Chinese manufacturers to request payments to a bank account that is not directly held by the same company entity that manufacturers yours products.

    Below follows a few common examples:

    a. Hong Kong Offshore Accounts

    Some suppliers prefer to receive international payments via a Hong Kong registered bank account, which in turn is held by a Hong Kong company. Hence, the supplier is paid indirectly, which makes it rather unclear which company is actually responsible for your products.

    That said, it’s so common that it would be hard to exclude suppliers based on this factor. There are, however, individuals using Hong Kong accounts for far more sinister reasons – payment frauds.

    At a minimum, you should only pay a Hong Kong-registered entity if the beneficiary name resembles that of the entity on the Chinese mainland.

    For example, ‘Hong Kong Feihang Optoelectronics Co., Limited’ or likely related to ‘Shenzhen Feihang Optoelectronics Co., Limited’ But, if the beneficiary name and the company name have no resemblance, you should be cautious.

    telegraphic transfers

    b. Export Agent Accounts

    Some smaller manufacturers don’t have export license. As such, they use Export agents, to clear their products through the Chinese customs.

    This requires that the Export agent sells the products to you, and then use your money to buy the products from the supplier.

    Of course, this comes at a fee, usually set at 2 to 3%. For you, this means that you will not pay your supplier, but their export agent.

    These are two different entities, which means that the beneficiary name is not that of the supplier. There is a risk, that the Export agent is not really an Export agent. However, I am not aware of any fraud cases involving Export agents.

    c. Private Bank Accounts

    There’s no good reason to wire business payments to a private bank account. You would probably never do that in your country.

    hsbc bronze lion

    3. Pay all bank transaction fees. Including the beneficiary bank fees

    When suppliers quote a price, they don’t take bank transaction fees into considering. Not even the fees charged by their own bank. Some suppliers may refuse to start production until the deposit is paid in full. To avoid delays, make sure you pay both yours – and the beneficiary bank fees.

    4. Save a transaction record and send it to your supplier

    For unknown reasons, Chinese account managers are allergic to checking their own bank accounts, and tracing payments made by their customers. For this reason, they want you to send them a so-called ‘payment record’. This is not a formal document, but could be anything that shows the following details:

    • Beneficiary name
    • Beneficiary address
    • Bank account number
    • Transaction Date
    • Paid Amount

    In most cases, a print screen of your internet bank will do.

    What can I do if something goes wrong with the Telegraphic transfer (T/T) payment?

    In case you manage to type in the wrong beneficiary information, there are two things you can do: a. Wait for the money to be returned to your bank account. This can, however, take up to three weeks. b. Contact your bank and submit the correct bank account details. This will cost you, but could save you several weeks.

    rmb cash

    Can I make international wire transfers in Chinese Yuan (RMB)?

    Paying suppliers using RMB, from outside of China, is not available in most countries. There are some exceptions though, such as Switzerland.

    It’s possible that RMB payments will become widely available at some point in the future, but the US Dollar reigns supreme in international trade for now.

    Can I pay my supplier using a service like TransferMate or TransferWise?


    Yes, cross border wire transfer services can be used to pay suppliers in China, and other countries in Asia. Using services like TransferMate or TransferWise can help you save hundreds of dollars per transaction, as banks normally charge around 3 to 5% – while these services often charge less than 1%.

    • Supplier email
    • Supplier company name
    • Business license number
    • Bank account number
    • Bank address
    • Bank
    • SWIFT Code

    Can I save money by opening a bank account in Hong Kong?

    Wire transfer fees from Hong Kong to Mainland China tend to be somewhat lower, compared to international wire transfers. However, opening a Hong Kong bank account normally requires that you setup a Hong Kong company.

    While you can setup a simple postbox company, the yearly maintenance costs will likely cost you far more than you’ll save on bank fees.

    In addition, TransferMate and TransferWise already offer lower international wire transfer fees than Hong Kong banks. In other words, it’s probably worth it.

    Do you have more to share about Telegraphic Transfer (T/T) payments to suppliers in Asia?

    Maybe we missed something, or perhaps you have personal experiences to share with us and our readers? We’d love to hear from you. Simply write a comment, using the form below. We read and reply to every single comment.

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