Sending and receiving payments from China

As the world’s largest exporter of goods, the People’s Republic of China is an economic force to be reckoned with.

For many businesses, sourcing suppliers in China makes financial sense. However, establishing efficient operations that preserve your precious profit margin can be notoriously tricky.

If you’re considering expanding your business to China or purchasing goods from Chinese suppliers, you’ll want to understand your options for making international payments. You’ll also want to know that you’re operating in a way that will deliver growth for your business.

This guide will explain the different choices to transfer money to and from China, including the fees you can expect to pay, how long they take, and alternative banking solutions that could reduce costs for your business when trading internationally.

Let’s start with some broader context around China and its unique financial landscape.
 

China is a relative newcomer to international trade. Since 1978, its wide-ranging economic reforms have seen the economy grow at an annual rate of 9.2%.

China has a unique payment infrastructure with many familiar names from the financial world completely absent. You won’t see Mastercard or Visa as UnionPay issues bank cards for ATM use. Forget Apple or Google Pay - nearly all Chinese residents use WeChat Pay or Alipay for regular retail payments.

To send money internationally, bank transfers, wire transfers, PayPal, and Alipay’s international transfer feature are all used by Chinese residents.

China imposes some of the strictest controls on its society of any country in the world. Access to the internet, for instance, is centrally controlled and closely monitored. The same goes for its economy.

Currency policy

China tightly controls its currency, the Yuan. Although it isn’t officially “pegged” to another currency (a mechanism to keep one currency’s value consistent against another), the People’s Bank of China (PBOC) sets a daily rate. It only allows the value to move within a very narrow range. This ensures China’s exports remain attractive to foreign businesses and keeps cash flowing into the country.

China also has strict cross-border controls on its currency, so Yuan trading on international markets may have a different value than in mainland China.

Customs policy

Whenever a Chinese supplier receives funds from overseas, they must complete documents for the State Administration of Foreign Exchange (SAFE) within five days.

Innovation

In 2017, Xi Jinping announced that China should aim to prioritise innovation and become a dominant force in areas such as artificial intelligence, semiconductors, and 5G technology. 

While China’s efforts to pursue this policy have been hampered by Covid and deteriorating relationships with the US, it has made notable progress. According to the 2022 Global Innovation Index, China is home to two of the world’s top five Science and Technology clusters: Shenzhen-Hong Kong-Guangzhou and Beijing.
 

The SWIFT network can facilitate payments to China. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications (SWIFT) and enables financial transactions between 190 countries.

In 2015, China began building its financial telecommunications network, the Cross-Border Interbank Payment System (CIPS). This international network settles transactions in Renminbi, the Chinese currency (more on that shortly). While the system has only come online recently, it aims to make the Renminbi a more commonly used international currency.

When you want to send money internationally, the specific countries available depend on the transfer service you use – we'll look at the different options available later in this guide. But, for example, with a 3S Money International Business Account, you’ll have ultimate flexibility and be able to send and receive payments in 65+ currencies across 190+ countries.

China’s official currency is the Renminbi which translates to “people’s currency” in Mandarin. The central unit of China’s currency is the Yuan, which is the most familiar term for international payments.

While there is a subtle difference, the two terms are used interchangeably. Think of it like British pounds. The currency's official name is Sterling, but it’s commonly referred to as the pound.

China’s official ISO currency code is CNY. You may also see CNH. This is the unofficial abbreviation for Yuan when trading in markets outside mainland China, such as Hong Kong.

At 3S Money, we recommend sending payments to China in Yuan. Most international businesses pay Chinese suppliers in USD. Chinese suppliers often add a premium to invoices paid in USD to offset any risk of losing out due to currency exchanges. Or they may renegotiate purchase prices to reach a more favourable deal. 

If you use your 3S Money International Business Account to send payments in CNY, you’ll avoid these additional costs of doing business in China. You’ll also increase the pool of suppliers through greater price transparency. Both outcomes will no doubt benefit your bottom line.

To transfer from the UK to China, you’ll need to fund it – and there are various options. Most providers accept corporate and personal credit cards, debit cards, bank transfers, direct debits, and even e-wallet services like Apple and Google Pay.

Some credit card providers consider an international transfer service a cash withdrawal and may charge you an additional fee. Be sure to factor this in when working out the total cost of your transfer
 

There are many different payment methods to ways to send money online from the UK to China. We’ll now look at each of these in more detail.

Your bank

You can ask your bank to transfer the funds. This is a popular choice for businesses and individuals as it’s often the easiest and most convenient. But it can also be expensive:

• Banks usually charge a fee to arrange and process money transfers (for UK banks, this varies from £20-£40).
   

• Some banks may also charge a percentage of the total amount you’re transferring (as much as 3-4%).
   

• Banks may use their own foreign exchange (FX) rates which could cost you 5-7% more.

All banks are different, so check your business account's terms to see your bank’s international transfer charges. If they charge a lot, consider an alternative.
 

Electronic Money Institutions offer many of the same financial products and services as traditional banks, but they operate differently. For one thing, they don’t have branches you can walk into. 3S Money, for instance, is an EMI.

More and more businesses, especially international companies, are using EMIs like ours to manage their financial operations, including transferring money. Here are a few reasons why:

• Savings: EMIs offer lower fees and more competitive FX rates than traditional brick-and-mortar banks.
   

• Simplicity: All your business transactions are accessible in one easy-to-use platform.
   

• Scale: Your business can grow quicker with greater access to multiple countries and currencies.

The alternative banking solutions offered by EMIs are attractive because they enable businesses to make payments in different countries without the need to hold local bank accounts.
 

Wire transfers are another option to send money to China from the UK. Providers like Western Union, Alipay, Weixin, and Xendpay are recognised locally. well-known examples. As with other services, there are pros and cons to this type of transfer, such as:

• You can choose how the money is received. Many services offer bank transfers, eWallet delivery, or cash pickup from a physical location.
   

• If you want a faster transfer, you’ll probably pay significantly more.
   

• These services often add a currency exchange rate markup, meaning either the sender has to pay more, or the recipient receives less. Either way, the provider pockets a healthy profit.
   

• Wire transfers can be less secure and harder to trace. Ensure that a recognised local body regulates your provider for peace of mind.

A 3S Money International Business Account lets you send money to 190+ countries and 65+ currencies, including the Chinese Yuan. Here’s how:

1. Open a 3S Money International Business Account

Once approved, you can send, receive, hold, and exchange Chinese Yuan from one globally accessible online account.

2. Enter the transfer details

Add the recipient’s name and account details, then choose the currency and country.

3. Send your money

Receive an alert when the transfer is complete (usually in under two hours).
 

A 3S Money International Business Account makes receiving payments from 190+ countries, including China, easy.

1. Open a 3S Money International Business Account

Benefit from one easy-to-use platform for all your international payments.

2. Give customers your account details

Collect international payments in CNY and 65+ other currencies.

3. Receive your money

See the payment arrive in your account (usually in under two hours) - there are no fees to receive international payments.
 

The answer is: it depends. Exactly how long depends on the type of transfer and the system(s) your provider uses.

• Transfers using the SWIFT network can take up to five working days to reach the recipient.
   

• Wire transfers vary in speed, depending on the provider and product. Some offer cash pick-ups or mobile wallet options where the money is available within minutes. Bank transfers typically arrive the next day.
   

• Remember, if you send a payment over a weekend or public holiday, expect your money to take longer to reach its destination. For example, banks are often closed for multiple days for China’s National Day celebrations, so it’s worth checking if you’re making a significant transfer.

All these factors will affect how long your transfer takes. For more precise timing, check with your provider.
 

In principle, there’s no limit to how much you can transfer. However, some providers cap the amount you can send in a single transaction. So, you may have to do multiple transfers if you want to transfer a large amount.

3S Money doesn’t impose transaction limits. Once you’ve been approved for an International Business Account, you can transfer high-value payments with ease to 190+ countries around the world.
 

If your provider does impose a cap, watch out for multiple transfer fees. If you send payments regularly in this way to pay supplier invoices, for example, the costs could mount up.

This is more likely to be the case with Chinese suppliers because local business regulations often require them to take 30% of an order’s value as a deposit before invoicing for the remaining 70% upon completion. If both parts of the order are significant amounts, you could make individual transfers – which means more fees and less profit for your business.

When transferring large amounts, consider the following:

• Always pay in yuan or local currency to avoid USD invoice fees.
   

• Some providers cap the amount you can send in a single transfer, so you may have to do several – each with its own fees and currency exchange markups.
   

• There may be a limit on the number of transfers you can make in 30 days.
   

• Larger amounts can take longer to process.
   

• Your provider may enquire about large transfers. This is considered best practice and an essential part of how institutions regulated by the FCA (like 3S Money) meet their obligations
   

We mentioned earlier how international transfers via traditional banks could be a costly way to send money to China. Let’s look in more detail at the fees you might pay:

Transfer costs

• Outgoing transfer fee: You’ll most likely be charged a flat fee for sending an international transfer. For UK banks, this varies between £20 and £40.
   

• 3S Money charges just $1 (or your local equivalent) per transfer regardless of how much you send. See more about 3S Money pricing.
   

• Incoming transfer fee: Most UK banks charge around £7.50 for receiving payments from international bank accounts. 3S Money charges £0.00.
   

• Initiation fee: Some banks might charge you a fee if you request the transfer over the phone or in person rather than online. Expect this to be around £20. 3S Money doesn’t charge initiation fees.
   

• Commission: Banks might also charge a fee based on a percentage of your transfer amount. For UK banks, this is currently around 3-4%.
   

• 3S Money charges just $1 per transfer (or your local equivalent) regardless of how much you spend

Exchange rates

The exchange rate you can find on Google or see on the news is called the “mid-market” rate. Banks apply their exchange rates to international transfers, meaning you’ll pay more – and they keep the difference. 3S Money offers FX rates up to 5x lower than traditional banks.

Keeping costs to a minimum is vital to efficient international business operations. 

Fortunately, alternative banking solutions (like 3S Money) are here to save you time and money when completing international transfers to countries like China.

We’ve covered a lot in this article, so here are some tips and main takeaways to consider:

• The Chinese currency is called the Renminbi but is commonly called the Yuan. Its currency code is CNY.
   

• With a 3S Money International Business Account, you can hold, send, receive, and exchange CNY easily from one online account.
   

• You can also pay Chinese suppliers in their local currency to avoid adding additional FX buffers to invoices.
   

• Check and compare the latest GBP/CNY exchange rate to your provider’s. You may have to dig to find this number, which may change depending on how much you’re transferring.Ensure that an independent body regulates your chosen provider.
   

• 3S Money is FCA-regulated and uses safeguarding to protect 100% of your funds. Other schemes, such as the FSCS, only cover up to £80,000 – so you have greater peace of mind with 3S Money.

Ready to start making and receiving payments to and from China in CNY? 3S Money’s International Business Account offers global payment solutions for businesses looking to operate in multiple countries – all from one easy-to-use account.