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Trade Tips
How to Choose Suitable Payment Methods
Release Time:2014-08-21 Clicks:1407 Author:


There are many ways to pay suppliers. Six most commonly used ways are TT, Letter of Credit, DA/DP, Western Union, PayPal and Escrow. Buyers are advised to consider each option carefully before committing to one.

30% Upfront TT
For buyers:  2.5 out of 5 stars
For suppliers: 4.5 out of 5 stars
Since many factories need money in advance to buy material for production, 30% Upfront TT is a common payment term for suppliers, especially when dealing with an unknown buyer. However, this method can be considered as a relatively reliable payment way if newly acquainted supplier take factory and credit verification by famous 3rd party, which may make sure the basic authenticity (Text cores: 3C products are not suggested to be paid by this mean, leading to

100% Upfront TT
For buyers:  1 out of 5 stars
For suppliers: 5 out of 5 stars
The supplier gets full payment before production starts. This payment method bears the same risk as Western Union and is not recommended when dealing with an unknown supplier.

100% Backward TT
For buyers: 4.5 out of 5 stars
For suppliers: 2 out of 5 stars
If being paid after pre-shipment inspections, it is suggested to use trade terms of FOB. If being paid after receipt of merchandise, it is nearly 100% reliable for buyer cause buyer can cover the whole risk, however, on the opposite, suppliers are not willing to accept this way due to big potential risk of dispute or fraud.


Letter of Credit
For buyer: 4 out of 5 stars
For suppliers: 4 out of 5 stars
Highly recommended for transactions that are US $20,000 and above because the bank guarantees the transaction.  But complex procedures and high threshold of registered finance may prevent some SMEs from being involved.

Western Union
For buyers: 0 out of 5 stars
For suppliers: 5 out of 5 stars
Not recommended when it comes to paying suppliers if the payment is not protected by escrow on a transaction made online through AliExpress. However, it's useful when transferring money to known individuals such as family members.
Western Union "Wire-a-friend" Scam
MTCN Fraud

For buyers: 5 out of 5 stars
For suppliers: 3 out of 5 stars
A popular payment method for buyers as it presents a much lower risk to them. However, it is less popular with suppliers due to difficulties in money withdrawal, high tax rates and uncertain claim of charge back from some notorious importers.

For buyer: 5 out of 5 stars
For suppliers: 3 out of 5 stars
Money is only paid to the supplier after the buyer confirms satisfactory delivery of his/her order. A safe way to buying and selling online because Escrow protects both the buyer and supplier.

New online secure payment way after Paypal and plays more and more important role by solving the problems of suppliers while maintaining the same safe level of buyers. (Stock purchase leads to; processing products still go through traditional payment way. )


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