China Exporters Prefer Bank Wire Transfer for Payment

Hemera/Thinkstock

According to Global Sources' latest survey of 70 suppliers, the majority of China exporters prefer receiving payments for their overseas orders via telegraphic transfer (also known as bank wire transfer).

The survey also indicates that only 66 percent of participants said their preferred mode of payment is letter of credit.  Although that method of payment is declining over the years due to L/C risks.

Further, credit restraints are making it harder for some issuing banks, usually in Europe and the US, to confirm or even endorse L/Cs.The last two make it difficult for suppliers to use an L/C as collateral in securing bank loans, reducing its appeal among SMEs further.

Read the entire article here along with key findings which are quite interesting - here's one:

   2.  A down payment of 30 percent is common, but buyers, especially long-term customers from the US and the EU, can press for more favorable terms.