What is the Cheapest and Safest Way to Pay on Alibaba in 2021
I would recommend Transferwise because they are cheapest, reliable and very transparent - plus you get real time updates on your money as it moves to your supplers bank account.
Like many e-commerce and dropshipping websites and online businesses, I use Alibaba and Aliexpress dropshipping to find factories in China or other overseas suppliers all over the world to manufacture goods.
I also normally pay on Alibaba for these goods. Last year was a great year for eCommerce businesses. Forecasts for 2021 are even better for online entrepreneurs and Chinese suppliers. I have had my orders grow from low hundreds up to many thousands of dollars per month. With my orders increasing to my dropshipping supplier the payment process has become more important.
How do I ensure that the safest money transfer service is used? Both for my monies protection and for the protection of my Chinese supplier of the product. Secure payment and my rights as a buyer are important even if I am only doing a minimum order.
The common methods to pay on Alibaba
- bank transfer
- wire transfer (T/T)
- debit card
- visa card
- another credit card like Amex
- mobile payment
- wechat pay
- supplier direct
- alipay app
What is the safest way to pay on alibaba in February 2021
After a supplier assessment, PayPal is the safest of these payment gateways - at least without using a form of escrow which we will cover later.
With any b2b platform, one of the key facets of trading is to find a reliable supplier and you can only do that by doing your due diligence and investing time and effort to get to know your partner from the numerous suppliers available to choose from.
Why is PayPal one of the safest payment options?
It is a secure payment platform that affords some payment protection because it has the ability to open a dispute if there is a problem.
What are some of the negatives of PayPal to pay for the product, or product sample on Alibaba
- no buyer protection for substandard goods
- no protection for quality
- no protection for late shipment
- hi fees for the seller - up to 5% and usually you end up paying that
So there is no trade assurance order with PayPal - but it does offer some protection on your payment terms.
However if you at the stage where you only need the minimum order quantity or samples then PayPal is probably not the best method.
PayPal is great but is best when making small orders such as samples and prototypes where the protection is worth the fee. However, PayPal can't be used together with Trade Assurance. Debit/credit cards and wire transfer can be used with Trade Assurance
What is the safest way to pay on Alibaba?
To improve the safety of the buyer/seller exchange, Alibaba has created an escrow service called Trade Assurance. It is one of a range of different payment methods which has arrived in mainland China but can be used anywhere for dropshippers or amazon seller alike.
It helps to protect you on product quality but of course, there are transaction fees. However, it is a good way to start with a potential supplier until you as a buyer have settled on payment terms and have a verified supplier to work with.
Traditionally considered a riskier and cheaper way to pay on Alibaba however, if used in conjunction with Trade Assurance, the funds will be sent to an intermediator bank account owned by Alibaba, not the manufacturer's unrecognizable and anxiety-causing Chinese address. The funds will only be released to the manufacturer when we have received the goods and are happy.
I have used this service in the beginning as an alternative to Alibaba secure payment and with a trading company that I had no relationship with and wanted to assess their product quality. Once I could them to be a reliable supplier with a quality product I used a different payment method.
TIP: Gold Supplier Membership is worth it on this b2b marketplace in the beginning.
Essentially it does what it says, a third party holds the funds in escrow until the goods are delivered. This allows us as the receiving party, to open a dispute should we be unhappy with the service, or quality and is a great way to have some protection when dealing with mainland china and before I enter into a more permanent relationship with an assessed supplier.
I always ensure that my potential supplier accepts payment by Trade Assurance, as it is the safest way to do business on Alibaba.
I've made around 20 orders using Trade Assurance and have never run into a problem, I'm not saying that it can't happen though. I find their transaction fees worth it.
So Trade Assurance / Escrow is the safest way to pay on Alibaba.
What is the cheapest way to pay on Alibaba in 2021?
The cheapest way to pay for products on Alibaba is Transferwise in February 2021
In the past, I have used a business debit card to make purchases and absorbed the 2.5- 3.5% fee. It is a payment option that many use.
However, your bank will provide a less than desirable exchange rate.
For example in the UK with a GBP account or in the United States and you are using your "old world" banks. The payment is ok in arriving in 2-4 days and fine for smaller volume orders however when you are ordering larger amounts of dollars worth of product, the fees and exchange rate become more significant and eat into the overall cost of the product and in their own rights can become significant.
Using a credit card is not a payment option either for this size of the transaction.
Thus, we have left with a wire transfer for the product.
A wire transfer can be completed by going into your bank or by using online banking. My bank, charges a hefty fee for international payments and provides a less than desirable exchange rate.
I believe the best method to pay on Alibaba is Transferwise.
Legit suppliers will accept Alipay (Quite Safe), Paypal (Most Safe), Credit Cards (Quite Safe).
Is it better to pay through Alibaba or Paypal - Can you get scammed on Alibaba - yes you can and until you know your supplier using a safe payment method like Paypal or trade assurance is recommended.
I would not recommend Western Union - although they are improving.
And you certainly can not pay cash on delivery - it does not work.
In the tables following I look at and compare the available payment options and their associated costs.
For transfers that are done from USD accounts there are no currency exchange fees which is good but there still are international bank transfer fees.
What I have done is compared the price of a $1000 transfer done from both a USD account in the United States and a UK GBP account.
An important point is that I do not try to estimate any intermediary bank fees as these change each time your money is routed internationally.
But from the more than 20 transfers I have done they range anywhere from $22 to $70.
Another important variable is the currency exchange rates - and I have to say when I checked this in February 2021 Transferwise (Free to Enrol and Join) was the best for the exchanges rates also.
To get the latest market currency exchange rates visit the Transferwise Exchange rate Calculator.
Cost To Send $1000 from a USD in United States Bank Avergaes
Bank Transfer Fees 22 - 75
Cost To Send $1000 from a UK Bank GBP Account Averages
Bank Transfer Fees GPB 11- 22
Cost To Send $1000 from a Australian Bank Averages
Bank Transfer Fees 15- 34
How To Send Money On Alibaba Through TransferWise?
To send money from US Dollars to China, follow these steps:
- Set up an account on Transferwise
- Choose an amount to send
- Enter the recipient's bank details
- Verify your identity
- Pay your transfer
And you're done!
I really like Transferwise - so much so that I contacted them about being an affiliate for their transfer services.
Will My Bank Charge Me For Using TransferWise?
Yes. According to TransferWise, you will pay a small fee to add money to your balances and convert between currencies in your account. Also, there is a small fee to send money from your TransferWise account to a bank account. And the good thing is, they never inflate the exchange rates and don't charge any fee when opening a TransferWise account.
Alibaba charges 2.95% of the payment amount for the processing fee. Note that the fee will be automatically deducted from your account when you make a payment, which normally arrives within 1 to 2 hours.
Supported cards: Visa, MasterCard, Diners, Discover, JCB, American ExpressSupported currency: USD, AUD, CAD, EUR, GBP, JPY, SGD, INR, KRW, MXN, MYR, PHP, RUB, AED, BRL, HKD, ILS, PLN, SAR, THB, ZAR for Visa & Mastercard; USD for balance credit cards.
Payment limit: USD12,000 per transaction
Do I Have To Pay An Import Tax From Alibaba?
Imported goods that are under $800 are free from customs duty according to USA customs. However, an import tax is mandatory for any goods amounting to $800 and above.
This is the list of import tax on some products below:
- Tablet PC: 0%
- Solar Panels: 0%
- Electric Bikes: 0%
- Furniture Products: 1%
- LED Bulb Lights: 3.9%
- Wrist Watches: 9.8% + US$1.53 per unit
- Clothing: 16.5%
- Peanuts: 131.8%
Do I Have To Pay An Import Tax From Alibaba?
To make a safe and secure transaction on Alibaba, trade assurance should be your top option. This can help your ordered products protected until it is delivered right next to your doorstep. So, if you place an order and never get the product (or you received a defective one) then Alibaba takes full liability on the issue.
How Do I Get A Refund From Alibaba?
First, you must sign in to Alibaba.com APP and carefully follow these steps:
Find the order, and then click View More to see the order detail page.
On the order detail page, Click Apply for a refund to open a dispute
Fill the dispute form then click "Submit". Requirements for the evidence: Max. file size: 10MB, Maximum of 5, format: jpg, jpeg, png, gif, zip.
After submitting the dispute, please wait for your supplier’s response. Here are some tips for you to handle the case:
a. You could check the disputed status and manage your dispute on the dispute detail page. Please go to the Order Management page, find the order and click 'View refund application' to check the status.
b. You could escalate the case manually and request the Alibaba dispute team to get involved from the 4th day onward or wait for the automatic escalation on the 31st day.
c. Please click here to view the whole dispute process to learn how dispute works on Alibaba.com.
d. As to when the case will be resolved, due to the uncertainty of complaint processing factors, like the responding efficiency by both parties, it's hard to specify when the case will be closed. To end it fast, please cooperate with the dispute agent after escalation.
Conclusion : The Fastest And Safest Way To Pay On Alibaba: TransferWise
To conclude everything that is written above, make sure to use Alibaba's Trade Assurance to cover any issues and concerns regarding the service and the product.
Also, use TransferWise upon receipt of the escrow bank account to save costs in sending money globally.
Bob has worked as a sales and marketing manager for some of the worlds largest tech companies. He brings a real depth of knowledge and is simply passionate about the advances in security technology.