Are you having doubts about Alibaba payment methods? Are you afraid of the risks associated with an online business, such as being scammed in Alibaba payment?

Alibaba is an international B2B and B2C site for e-commerce and suppliers from China. It serves as a bridge between you as a buyer and supplier to make a business deal. You need to be aware of the process and make sure not to deal with fake suppliers.

There are various risks you can face with any transaction when you pay with Alibaba. This article will guide you through the safest Alibaba payment options if you want to be secure in your payment transactions.

We will thoroughly discuss the following topics:

  • Best Alibaba Payment Methods
  • Which Payment Methods Work for You
  • How Do You Pay in Alibaba
  • Safest Way to Pay in Alibaba
  • Trade Assurance of Alibaba
  • How to Avoid Payment Fraud
  • Frequently Asked Questions

Table of Content

Chapter 1:  Alibaba Payment Methods

Chapter 2: Alibaba Payment No1: (Telegraphic Transfer)

Chapter 3: Alibaba Payment No2: (Escrow)

Chapter 4: Alibaba Payment No3: (Alibaba Trade Insurance) 

Chapter 5: Alibaba Payment No4: (Payment Links)

Chapter 6: Alibaba Payment No5: (Later Method)

Chapter 7: Alibaba Payment No6: (Online Transfer)

Chapter 8: Alibaba Payment No7: (PayPal)

Chapter 9: FAQs About Alibaba Payment

Chapter 1:  Alibaba Payment Methods

Before you click the Pay Now button, if you are wondering whether to use PayPal, Alibaba Escrow Service, or other payment methods, please learn the difference between the Alibaba payment methods. It may vary on the number of orders and if you are qualified to use other payment services.

1. How Do You Pay on Alibaba?

There are various ways to pay your suppliers in Alibaba. You can pay through the Alibaba payment system or negotiate with your supplier and pay outside the platform. With this regard, please be minded of the risks on payment security.

2. Alibaba Payment Options


If you are an importer for large volumes, here are the common Alibaba payment methods:

  • Bank wire transfer or TT
  • Alibaba Secure Payment (Escrow)
  • PayPal
  • Letter of Credit

These methods are more secure and provides peace of mind

If you are importer of small volumes then Western Union is feasible but is tagged as high-risk Alibaba payment methods. .

Local Chinese payment transfers through WeChat and Alipay are also risky since they are not considered as an international transaction and will be seemed illegal payment transfer.

3. How Does Alibaba Payment Work?

Various methods of payment can be made in Alibaba. This article will guide how bank transfer, Alibaba Secure Payment, Alibaba Trade Assurance, Payment Links, Pay Later, etc., works. You must know which types of Alibaba payment methods are applicable for you.

Chapter 2: Alibaba Payment No1: (Telegraphic Transfer)


A Telegraphic Transfer or TT is an electronic way to transfer funds. It is commonly used for any overseas wire transactions. The money is transferred electronically to other banks. The term “telegraphic transfer” has its origin in the way that banks used to make international money transfers.

1. How Does the Bank Transfer Process Work?

The most important thing to remember when you use the TT way of payment is to complete the supplier’s information, such as the complete address and the beneficiary (name of the supplier).

Then the bank account details – bank address, swift code, and country. The bank transfer process in the US may take from 2-4 working days to complete.

If something goes wrong with your TT transfer, call the bank and present the correct bank account details or wait for the money to be returned to your bank account. Usually, it takes three weeks before the complete transfer. Calling the bank may be costly but can speed up the process.

2. Pros and Cons in Paying through T/T

Here are the pros and cons of paying through Telegraphic transfer:


  • Low bank transaction fee (between $30-$50 per transfer) and fixed bank transfer fees for large orders
  • Fast and convenient payment
  • Common way of international money transfers
  • Favorable exchange rate for Chinese suppliers
  • Can negotiate for payment terms


    • Delays due to holidays, time zones, weekends
    • Cannot easily get your money back
    • Minimum of three working days to process
    • Issues in returning of items once the payment is transferred in the total amount
    • It could be risky for first-time buyers

  • Errors in filling out the documents can cause delay and withheld money by the Chinese bank

It is best practice to negotiate the payment terms to pay only a small proportion of the money and pay the remaining balance upon inspection or delivery.

Chapter 3: Alibaba Payment No2:(Escrow)


Alibaba offers this Alibaba Secure Payment service (formerly Escrow), whose primary benefit is to hold buyers’ funds until they receive and approve the orders they purchased. So, in case of any disputes, Alibaba can act as a mediating platform to help the buyer get a refund.

The downside of Alibaba Secure Payment is its limitation to pre-approved suppliers on Alibaba only.

Meaning, if you searched your suppliers in a trade show or Global Sources, they wouldn’t be qualified unless they are pre-approved Alibaba suppliers. Also, Alibaba suppliers are charged for 5% service fee and will credit you. It would also mean additional cost and risk for the suppliers.

1. How Does Escrow Work

For buyers, the payment is released to the suppliers only after you confirm the receipt of your order without any complaints or disputes.

For suppliers, Secure Payment verifies all the payment details in every transaction. The suppliers are required to ship the products after the confirmation of payment receipt.

Therefore, Alibaba’s secure payment only allows the buyer to deposit an unlocked payment to the supplier once the buyer confirms the products.


Here are the simple steps on how Escrow payment works:

  1. The customer needs to pay the deposit.
  2. The supplier ships the goods to the customer.
  3. The products import and undergo clearing process in customs.
  4. The buyer receives the products and either rejects or approves.

Once the buyer rejects the products, the payment is withheld. It depends on the circumstances whether the buyer’s dispute will be granted. Alibaba would require a third-party inspection that would cost around $200-300 to validate the dispute.

To avoid the hassle of refund and return products, read the product description carefully upon placing your orders. A product claim can be filed if the supplier did not ship the right products based on the order and listed specifications.

2. Pros of Using Escrow

  • Reduce the risk of Alibaba scams
  • Easy to use and integrates well with the system
  • Offers flexible payment terms
  • Free for buyers

3. Cons of Using Escrow

      • Limited pre-approved Alibaba suppliers

  • Full payment, which ties up to your cash flow
  • The added cost to your products of 5% for the service