The Cheapest and Safest Way to Pay on Alibaba: TransferWise

The Cheapest and Safest Way to Pay on Alibaba: TransferWise

Like many ecommerce guys, I use Alibaba to find factories around the globe to manufacture goods. I also pay on Alibaba for these goods. With my orders now climbing to the 10’s of thousands of dollars, the payment process has become steadily more important.

I want to ensure that the safest service is used both for protection of my money and for protection of my rights as a buyer, and all for the cheapest cost to me. We’re trying to run a business here!

The common methods to pay on Alibaba are considered to be via PayPal, wire transfer (T/T) or by debit/credit card. PayPal is the safest of the three as it affords some payment protection with the ability to open a dispute if there is a problem.

It doesn’t however, provide any buyer protection for example if the goods you receive are substandard in quality or arrive three months late with half of it missing. It also costs the seller a nifty 5%, which you the buyer, will usually end up covering.

To improve the safety of the buyer/seller exchange, Alibaba have created an escrow service called Trade Assurance. Which does what it says on the tin, a third party will hold funds until the goods are delivered. This allows us as the receiving party, to open a dispute should we be unhappy with the service.

I always ensure that my manufactures accept payment by Trade Assurance, as it is the safest way to do business on Alibaba. I’ve made around 30 orders using Trade Assurance and have never run into a problem, I’m not saying that it can’t happen though.

Ok so that’s the safest way to pay, now what’s the cheapest?

As discussed, PayPal is great but is best used when making small orders such as samples and prototypes where the protection is worth the fee. However, PayPal can’t be used in conjunction with Trade Assurance, bummer.

But Debit/credit cards and wire transfer can be used with Trade Assurance.

Previously I’ve used a business debit card to make purchases and eaten the 2.5% fee (now risen to 2.95%). Kindly your bank will also provide a less than desirable exchange rate if for example you’re in the UK with a GBP account, like me.  The payment is swift arriving in 2-4 days and fine for smaller volume orders however, when your ordering $1000’s worth of product, the fees and exchange rate become more worrisome.

Thus, we are left with the wire transfer. 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 unrecognisable and anxiety enducing Chinese address. The funds will only be released to the manufacturer when we have received the goods and are happy.

A wire transfer can be completed by going into your bank or by using online banking. I bank with NatWest, who charge a hefty fee for international payments and provide another suboptimal exchange rate.

Related: Why you should be using Fetcher for Amazon FBA (Review)

This drove me to look for alternatives

I now use TransferWise, a free to use online payment service who have banks in multiple countries to eliminate international exchange fees (it’s more clever than that but keeping it billy-basic). They are simply the cheapest way I’ve found, to send money internationally.

I like their website, it allows you to see how much it will cost to send a payment with no hidden charges. It also gives a comparison to the UK banks prices which is constantly updated.

On a recent $3000ish payment to China, I paid £17 in fees. NatWest would have charged me close to £100 after exchange rate and fees were applied.

Here’s an example of how it works, if I was going to send $8000, it would cost me £25.46 in fees with a great exchange rate.

Now compare the price to the banks, the savings are clear.

If I used HSBC for example, I would be $207.90 further out of pocket!!

These savings really do make a difference, enough to compel me to write an article about it. I didn’t realise these amazing payment services existed – I thought that we had to wait for cryptocurrencies to bring the international payment prices down.

TransferWise use a novel concept that I’d encourage you to read about on their website to enable their cheaper pricing. Who would have thought it would be my countryside, bed & breakfast owning father that would discover them and tell me about it – good work!

Parting thoughts

So to summarise my thoughts on the matter: use Alibaba Trade Assurance to cover you for any issues with the goods. Upon receipt of the escrow bank account, use TransferWise to cost effectively send the money across, voila. Cheap and safe.

This article is angled towards the Amazon FBA and ecommerce audience looking to pay on Alibaba however, TransferWise can be used for anything and everything, international or not. They are my new favourite money saving ally.

I was so impressed with TransferWise that I wrote to them and asked to become an affiliate for their service. If you’ve found this helpful and do fancy giving them a go, I would be most grateful if you might use my link to sign up! No cost to you, just helps me out running the site. If you’d rather not use my link then that’s fine too, I just hope you’ve taken something useful away – that’s what motivates me to write.

Related: How to Start an Amazon FBA Business 6 Step Guide

I hope this has inspired you to do a bit of research around payment options and save some hard-earned capital – I know it was a revelation for me.

Take care,

Review Date
Reviewed Item
Author Rating

24 Replies to “The Cheapest and Safest Way to Pay on Alibaba: TransferWise”

  1. Hallos, good day, I am Thelma from Nigeria and I buy goods regularly from alibaba and I find your article very helpful, please how do I benefit from transfer wise Since I am based in Nigeria? Looking forward to your reply, thank you.

  2. Thanks for taking the time to write such a helpful article. I appreciate it. When you use transferwise, you are no longer covered by trade insurance anymore isn’t it? To be covered by trade assurance you have to do it via one of the Alibaba payment gateways. How do you use transferwise and get covered by trade assurance exactly?

    1. Hi Carmen,

      Absolutely my pleasure, I’m glad you have found it useful. Yes, you are still covered by Trade Assurance when using TransferWise. In your TA order, simply select ‘Make payment’ and click ‘Wire Transfer’ (T/T), then select ‘citibank’. Finally, click ‘View Account Information’, put this account info into your TransferWise payment (don’t forget to include the reference number near the bottom).

      You will then get an email from TransferWise and from Alibaba when the payment goes through and is received by the supplier – easy!

        1. At present, Transferwise don’t support transferring with CNY. I have my suppliers work in USD – I am then able to use Transferwise to send them their fees in USD. Again this is all covered by Trade Assurance.


  3. Hi friend.Thank you for your post.The payment is done on alibaba platform or on our transferwise account? Which reference number are you referring ? Alibaba gives a reference number for each order? Where do I have to add it?

    1. Hi Jean-Francois,

      You log in to your TransferWise account and simply copy/paste the details from the Alibaba T/T payment page. At the bottom of the Ali payment page, you will see a reference number for your order/payment. It’s a good idea to copy this and paste it too (the box for reference number shows after you input the bank info in Transferwise).

      Hard to explain but very easy if you start clicking around – it will make sense.

      Hope this helps.

  4. Hi Dom! Thank you so much for the great post. I heard so much good things about TransferWise and opened the account before I saw your post. I really didn’t know how this things really work for paying a supplier on Alibaba until I read your post. It is super helpful and thank you so much for posting it. Now I managed to transfer my GBP account to TransferWise and waiting for the funds to arrive. May I know how long does it take in total, in order to receive payment from supplier side?

    1. Hi Rosy,

      That’s great news, I’m glad I could be of help. It usually takes 1-2 days for the funds to arrive in my overseas suppliers’ accounts!

      1. Hi Dom, please disregard my questions. I got through this time. I learned something new. I didn’t expect the city name for Singapore also called Singapore and I managed to google the postal code for the bank address they provided. It went through and I save tons of money. Thank you so much for posting this article, it helped me a lot and I’m sure it will help others like me as well.
        God Bless,
        Kindest regards,

  5. Your post is very informative. Thanks for that!
    Can you please guide me on this. While I’m trying to register my supplier on the Transferwise the page is asking for IBAN and Swift Code which I obtained from the T/T page of my Alibaba order but Transferwise is giving me an error on the IBAN field (but the IBAN in Alibaba says “Please pay via CHAPS only”) does that mean it is meant for CHAPS and not for Transferwise. Please advise.

    Also please let me know is this transfer going to Alibaba’s Bank and then It will be transfered to my supplier at later point of time?

    1. Hello,

      I’m glad you found it useful. I’m not quite sure why an IBAN number is required unfortunately. When I make payments to suppliers using the T/T account information in Trade Assurance, I only use the bank account name and address, SWIFT code, account number and order number. I might add that I usually pay from a debit/credit card, perhaps you are doing bank-bank?

      Yes that’s correct, you transfer money into Alibaba’s bank account in Singapore where it is held until the supplier ships the products. Additionally, Trade Assurance enables buyers to apply for a refund if they are not happy with anything up to 30 days after the products have been delivered – this is why I use it!

  6. Hi there!
    thanks for your post. I’ve contacted Transferwise and they explained me that all USD payments to a country outside the USA are so called SWIFT Payments.
    Since I need to pay from Europe (Germany, EUR) to China in USD, this goes under SWIFT.

    1) I was wondering if I can make this SWIFT Payment under Alibaba Trade Assurance, and you confirm it, right?

    2) Transferwise also says that with SWIFT Payment there is an additional fee 25-50 USD which the intermediary banks might hold during the transfer, so that the recipient will not exactly get all that you are sending. They say that this fee cannot be calculated in advance. So how can we pay the right amount to the chinese seller under such circumstances?
    Info taken through contact with TW support and from:

    Thank you in advance!

    1. Hi Rick,

      1.) Correct, you will send EUR to USD, then the details of the recipient will be Alibaba’s intermediate bank in Singapore most likely.
      2.) That is interesting, I’ve never knowingly paid more than the stated fee when making a transfer. However, I have once had a supplier receive about 10USD less than I had anticipated – perhaps this was said mechanism at play. I have made nearly 100 payments using Transferwise with only this one shortcoming, I would consider that worth the savings however, I’ll leave that one up to you.

      Hope this helps, take care!

  7. Hi Dom,

    Such great information – super helpful. I only wish I’d seen it earlier. I’m a novice when it comes to Alibaba. I placed an order a few days ago – only a small one (a few hundred pounds) and just paid using my debit card 😳 I’m worried now I’ve made a mistake in doing so. What do you think? Will I be charged by Barclays? If so, that’s even MORE money eating into my profits! 😞 Any advice would be so very much appreciated.

    1. Hi Dee!

      You will have been charged 2.95% at the time of writing if paying by debit card. Not a massive deal with smaller orders like yours however, the larger the order, the better off you are with Transferwise.

      Hope this helps.

  8. Hi, thank you for this article.
    I live in Côte d’Ivoire and want to use transferwise to buy on alibaba. But our currency is not supported. So I’m thinking of asking someone in UK or euro zone to add some USD on my transferwise account and I’ll pay him back here with our local currency.
    My question is, does alibaba take fees for wire transfer payment? If yes how much are these fees?

    Thank you.

    1. Hi Fernand,

      When paying on Alibaba, if you select T/T (wire transfer) and then select the Citibank option – this will just give you the bank details which you input to Transferwise. As you are not using Alibaba for the transaction but instead Transferwise, there are no fees from Ali.

      I hope that makes sense.

  9. Hi
    I made a Payment via TransferWire and the payment has left my TransferWire account but said they have not received the payment and want bank statements and iban numbers Of the account that the payment came from but I can not give them it as I don’t have it. Can you advice??

    1. Hi Kerry,

      Assuming you mean TransferWise, I like to include my reference number for the Alibaba order as the payment reference, this way the supplier can easily identify your payment regardless of where it has come from. Did you manage to get it fixed?

  10. Hi Dom…

    Thanks for sharing this valuable information to us..
    quick question..

    Is it safer to use pay now or bank transfer on transfer wise instead of using debit card that incur additional charges??

    I saw only these 2 options are free…

    Please advise


  11. Hi Dom,
    I just signed up for Transferwise using your link. Thank you so much for sharing the information and your knowledge/experience. Very helpful. Please keep writing 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *