How to Pay Overseas Suppliers Without Breaking the Bank: A Guide for U.S. Importers

So, you’re importing $10,000 worth of products from China. Exciting! But things can get overwhelming between navigating freight logistics and managing payments—especially when hidden bank fees eat into your profits. If you’ve ever wondered why your vendor receives less than expected or transfers take days (or weeks!), this guide is for you.

Let’s break down how international payments work, why traditional banks like cost you more than they should, and how modern alternatives can save you time, money, and headaches.

The Traditional Route: Sending $10k via a U.S. Bank

Picture this: You’re at your desk, ready to pay your Chinese supplier. You log into your bank account, initiate a wire transfer, and hope for the best. Here’s what actually happens behind the scenes:

1. Initiating the Transfer

   • You provide the supplier’s bank details (SWIFT code, account number, etc.).

   • Your bank charges $40 to $50 just to send the money.

     
     

2. Currency Conversion

   • Your bank converts your USD to Chinese Yuan (CNY) at their exchange rate. Let’s say the mid-market rate is 1 USD = 7.25 CNY. Your bank offers you 6.8 CNY/USD instead.

   • Their markup: Assuming a fair rate of 7.0 CNY per dollar, on 10k, that amounts to 2,000 CNY, divided by 6.8 CNY/USD, resulting in a loss of $294 due to exchange rate margins.

     
     

3. Intermediary Banks

   • Your money bounces through 1–2 intermediary banks, each taking a cut (another $10 to $30 each).

   • The recipient’s bank (e.g., Bank of China) deducts another $10 to $20.

Total Cost: something between $354 to $364.Supplier Receives: ~69,000 CNY (instead of 72,500 CNY at the fair rate).

Ouch. That's expensive.

Why Traditional Banks Aren’t Your Best Bet

Traditional banks thrive on:

• Hidden FX markups (up to 3%!).

• Slow SWIFT transfers (3–7 business days).

• Layers of fees (sending, receiving, intermediary).

  
  

But here’s the good news: You have options now. I fully understand that making those changes sometimes is not easy, but it is worth it to at least explore and test.

Modern Alternatives: Faster, Cheaper, Smarter

Fintech platforms are shaking up cross-border payments with transparent pricing, better exchange rates, and direct routes like China’s Cross-Border Interbank Payment System (CIPS). Let’s compare your options:

(For a deeper dive into CIPS, check out our guide: CIPS for Small Businesses)

Why CIPS Matters

Platforms like Airwallex and PingPong Global use CIPS—China’s homegrown payment system—to bypass SWIFT entirely. This means:

• Lower fees: No intermediary banks taking cuts.

• Faster transfers: 1–2 days vs. a week.

• Better exchange rates: Direct CNY settlements at near mid-market rates.

For example, sending 10k via Airwallex saves you around $250 compared to a traditional US Bank. What if you import let's say 10 times during the year, that's $2,500!! That’s money you could reinvest in marketing, inventory, or even partnering with a top freight forwarder in Miami to streamline shipping.

But Wait—What About Compliance?

China has strict capital controls. To avoid delays:

• Provide invoices or contracts proving the payment’s purpose.

• Use platforms with built-in compliance checks (e.g., PingPong, LianLian Global).

  
  

Other Options

There are several other options (including traditional banks) that can offer appealing solutions. The best alternative will depend on the countries that you make business with and what are the most relevant features for your specific operation. Here you have a comparison of some other options.

Final Thoughts

Gone are the days of losing thousands to banks. Switching to platforms like Airwallex or Wise Business, you keep more profit and build stronger supplier relationships.

Ready to cut costs and boost efficiency? Your bottom line (and suppliers) will thank you. Contact us for more information.