When purchasing on Alibaba, you must be confused about the various payment methods on the platform and have no idea about which way is better for your order. In fact, many buyers have ever encountered the problem. There are indeed many differences for various payment methods on Alibaba. So, I will analyze them in detail in my today’s post to help you choose. Suitable payment can enhance a layer of your buying security on Alibaba.

Table of Contents

1. Eight types of Alibaba payment methods


Paypal is a widely used method in over 200 countries around the world. And it supports more than 100 types of currencies. Besides, as buyers, you needn’t undertake transaction fee via Paypal.

But if you want to use Paypal, the order will be taken off Alibaba. That means, you will send money to suppliers directly without using Alibaba. Under such a circumstance, Alibaba will just act as an information exchange platform. So it will not provide protection service for your order.

However, like Alibaba trade assurance service, if the goods turn out to be unqualified or some other problems like you didn’t receive the shipment, you can also apply to the Paypal platform for a refund. Through evaluation, you will get a refund from Paypal.

But the processing fee of Paypal is relatively high, not all suppliers on Alibaba will accept Paypal, I will explain the reason in detail in the FAQ section. So you had better ask suppliers whether they can accept Paypal before you decide to choose the way.

In a word, Paypal is a recommended payment way for the first order or sample, especially when you need to judge the supplier is reliable. Paypal can provide you a good buyer protection service.

Wire transfer(T/T)

International wire transfer is an electronic transfer of funds across a network administered by banks around the world and is normally made at a bank or via online.

Its transaction fees usually range from $20-80 for per transaction depending on the payment amount and policy of the remitting bank. 

You can negotiate with suppliers about whom to undertake the transaction fee, you, supplier or split between you both. And your suppliers can receive money within 3-7 working days. Generally, the payment way is more suitable for a large amount of orders.

In 2018, Alibaba introduced a new payment method, domestic wire transfer. In this way, you can transfer funds to a domestic receiving account using Alibaba.com’s remittance channel partners with local currency instead of wiring funds to an overseas bank. Currently, it is available in the USA, Canada, Australia, The United Kingdom, most countries of Europe.

If you have a domestic TT account, there will be 2 accounts for you to choose when you are ready to arrange payment.

TT account choice

There are mainly 3 features for domestic wire transfer,

  1. Low transaction fee
  2. Faster processing time
  3. Lock the exchange rate for 7 days

The following chart shows the differences between domestic wire transfer and international wire transfer.

Different aspectDomestic wire transferInternational wire transfer
Transaction feeUsually 5 local currency or less for each transaction.$20-80 for each transaction
Processing time1-2 business days3-7 business days
Fixed exchange rateLocked exchange rate for 7 daysNot supported
Supportable regionsUSA, Canada, Australia, The United Kingdom, Most countries of EuropeNo geographic limit

Western union

Western Union is a worldwide financial service and payment network that Alibaba.com users in the U.S. can utilize to send funds to recipients. For this payment method, the receiver usually can receive the payment within 1 business day.

But you should notice one thing about the payment method, that is, the supplier won’t arrange the shipment until they receive the fund, which is risky for you. So if it’s the first order between you both, the payment method is inadvisable. Unless you are sure the supplier is reliable, can you consider adopting the way.

In addition, it is just applicable to Alibaba users in the USA, and has a limit of $5000 for each transaction. You need to undertake the transaction fee, which varies from the amount of the fund as below,

Payment amountTransaction fee
$1000.01-$2500.001.8% of the payment amount

Online bank payment

Customers with bank accounts based in the U.S., France, or Germany may use Online Bank Payment( formerly known as e-checking) to pay for large orders on Alibaba.

It supports USD and EUR. About the transaction fee and processing time, you can refer to the below picture.

Account originOrder amount limitTransaction fee for different valueProcessing time
United states$50,000≤$1,000.00 value, $15;
$1,000.01-$10,000.00, $20;
$10,000.01-$50,000.00, $30
4-5 business days
France & Germany$10,000≤$1,000.00 value,€15;
$1,000.01-$10,000.00, €20;
9-10 business days

Online transfer

Online Transfer is a convenient online payment method which is applicable to large payment amounts, but it is currently available only to Alibaba.com users in Europe.

By cooperating with recognized third-party financial institutions such as Trustly, Ideal and Sofort, you can complete payments in local currencies at any time without having to set up a separate payment account, and it can be done via any computer with internet access.

The exchange rate is provided by the third-party financial institute. And the seller can receive the fund in 1-2 business days.

The below picture shows the specific transaction fees for the method:

Payment amountTransaction fee
$1,000.00 or less$15

Note: Each transaction is limited to $300,000 (Sofort currently only supports transactions below $5,000); In the meantime, you also need to pay attention to the limit of your own online bank for each transaction.

Credit card

It is a very quick payment method, the receiver can receive the payment in 1-2 hours. But it sets a limit of $12,000 for each transaction.

And you need to cover the transaction fee: 2.95% of the payment amount (capped at US $40 in the APAC region for MasterCard payment in USD & 3.5% of payment amount for American Express Payment).

Visa, MasterCard, Diners, Discover, JCB, American Express are accepted. And it supports many different currencies: 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.

Pay Later

Alibaba Pay Later is a new payment method on Alibaba, which is only available for buyers in the USA currently. When you use the method, the third-party financing institution will help you pay. Then you repay the loan.

But if you want to apply for the loan, you need to be in Alibaba business for at least one year. Once approved, you can access up to a 6-month loan of $150,000 on Alibaba. The minimum rate is 1.25% for the first month. The loan limit you can get will be given by Kabbage Funding according to your business performance.

In addition, there are no prepayment penalties, so you can prepay a loan at any time. There are no order transaction, origination, annual, or maintenance fees. ( The service currently unavailable)


Boleto is the most commonly used payment method in Brazil. And users can complete the payment through online banking or offline banking agencies.

But the monthly payment amount should be within $3,000, the transaction fee is 1.3% of the payment amount.

You can find more about detailed payment processes in my another post.

2. Five FAQs about Alibaba payment

Will all Chinese suppliers on Alibaba accept Paypal?

Actually, Alibaba doesn’t support PayPal officially, and many suppliers in China don’t accept the way, neither. There are mainly two reasons,

Higher processing fee

Sellers need to cover the transaction fee and withdrawal fee. The transaction fee standard varies from the Paypal collection account in different country. For Chinese accounts, the standard is 3.4%+0.3$ to 4.4%+0.3$, which is related to the monthly collection amount.

Besides, when they withdraw USD into their Chinese mainland bank account, they need to pay $35 for per transaction. So the whole fee is relatively higher than other payment methods.

High risk for suppliers

Paypal has a good buyer protection policy. You can open a dispute and provide evidence as required within the prescribed period of time. Paypal will mediate in the dispute and evaluate the evidence you provide, then give a solution, full compensation or partial compensation.

But there are some dishonest buyers applying for refund because of quality problem although the product is good in reality. Under such circumstance, the seller’s account are faced with the risk of being frozen, and their benefits can’t be guaranteed well.

Hence, many suppliers won’t accept Paypal for large orders. But for some sample orders, some suppliers will agree.

Can I pay suppliers on Alibaba via Letter of Credit (L/C)?

Payment via L/C is available on Alibaba. As the way will involve issuing bank, negotiation bank, it will be safer for both parties. For buyers, it can reduce the risk of products not in accordance with the documents. For suppliers, they can receive money on time.

In addition, the way has no limit for the order amount, so it is suitable for large orders. You can choose to issue the usance L/C, which is beneficial for you to manage your cash flow.

But L/C will need a lot of extra paperwork and not all companies can issue L/C. The issuing bank will give the credit line after evaluating the company performance. So for small orders, L/C is inadvisable.

How to pay via Paypal on Alibaba, is it safe?

Alibaba doesn’t support PayPal officially. So if using Paypal, suppliers will complete the order off the platform, not through Alibaba. Then your transactions will be not protected by Alibaba, which means if you have a dispute over this order, Alibaba will not mediate.

However, Paypal itself has a good buyer protection policy, which is also safe for your order. And if there is something wrong with the products, you can also apply for a refund.

What is the safest way to pay on Alibaba?

Choosing Alibaba trade assurance service is the safest way to pay on Alibaba. You can open Alibaba trade assurance dispute if there is something wrong with the product, and Alibaba will mediate and deal with the dispute.

Moreover, trade assurance support many kinds of payment methods including Credit Card, T/T(Bank Transfer), Online Bank Payment, Online Transfer, Western Union, PayLater and Boleto.

But although Alibaba trade assurance can protect you well, it is not 100% safe. The most important thing is still to select a reliable supplier. Before you place the order, you need to make a complete evaluation from many aspects like their professional knowledge, efficiency of communication, etc.

What’s the best Alibaba payment method?

There are many payment methods on Alibaba like L/C, T/T, Western Union, etc. Each way has its own pros and cons which I have explained in the above section. In addition, some methods have some limits in some aspects like countries, so it is difficult to define which is absolutely the best way. What you should do is to choose the suitable one according to your own actual need.

To the end

I hope you can benefit a lot from my post and know how to choose a better payment method on Alibaba according to your own actual needs. If you think the post is helpful, welcome to share it with your friends. Or if any questions about Alibaba payment options, leave a comment below. And we will be always here to help you.

We, Jingsourcing, a leading sourcing company in China, are dedicated to helping our clients source good products from China with the most competitive prices. If you want to wholesale or dropship from China, please feel free to contact us.

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