Cheapest ways to send money to suppliers in China from Canada

Sending money to Chinese suppliers represents one of the largest operational expenses for Canadian businesses importing goods from Asia. With cross-border bank credit reaching a record $34.7 trillion globally in Q1 2025 ¹, finding cost-effective payment methods has become critical for maintaining competitive margins. The digital payment market, valued at $10.18 trillion in 2024, is transforming how businesses handle international supplier payments ².

For procurement teams managing regular payments to Chinese manufacturers, the difference between payment methods can mean thousands of dollars saved annually. Traditional banking channels often charge up to 3.5% in fees for international transfers ³, while modern financial service providers offer significantly lower rates through local payment networks.

Understanding the true cost of supplier payments to China

When evaluating payment methods for Chinese suppliers, procurement teams must consider multiple cost factors beyond the advertised transfer fee. Exchange rate markups represent the hidden cost that significantly impacts your bottom line. Research shows that 44% of businesses are frustrated by poor exchange rates when sending money internationally ⁴.

The total cost of sending money to China includes several components that vary dramatically between providers. Wire transfer fees through traditional banks typically range from flat fees to percentage-based charges. SWIFT network fees add another layer of expense, particularly for urgent payments. Exchange rate spreads, where providers mark up the mid-market rate, often represent the largest hidden cost. Additionally, correspondent bank fees can reduce the amount your supplier receives, potentially causing payment disputes.

Timing also affects costs significantly. With 65% of businesses ranking speed as their top priority when choosing a payment method ⁴, faster payment options often come with premium pricing. However, modern payment solutions are challenging this trade-off by offering both speed and competitive rates.

Comparing payment methods: Real cost analysis

Traditional bank wire transfers

Canadian banks remain a common choice for supplier payments, but their costs can be substantial. Banks typically charge both sending and receiving fees, plus unfavorable exchange rates. The CHIPS network successfully onboarded to ISO 20022 in April 2025, with the Fedwire Funds Service expected to migrate in March 2025 ⁵, potentially improving processing but not necessarily reducing costs.

For a typical $10,000 payment to a Chinese supplier, traditional banks might charge transfer fees, exchange rate markups of 2-4% above mid-market rates, and potential intermediary bank fees. Your supplier might receive less than expected due to these deductions, creating reconciliation challenges.

Digital payment platforms

Modern financial service providers have revolutionized international payments by leveraging local payment networks. These platforms eliminate many traditional banking fees while offering competitive exchange rates. Airwallex, for instance, uses its local network to eliminate transaction fees and deliver funds faster and in full ⁶.

The advantages become clear when comparing actual costs. Digital platforms typically offer market-leading FX rates with zero hidden fees ⁶. Funds can be received in as little as one business day, significantly faster than traditional methods ⁶.

Payment aggregators and marketplaces

Some businesses use payment aggregators or marketplace-specific payment systems when dealing with Chinese suppliers. While convenient, these often include service fees that add to overall costs. The largest 10 merchant acquirers processed $9.5 trillion in card payments in the US in 2023 ³, demonstrating the scale but also the fee structure inherent in these systems.

Optimizing payment costs through strategic timing

Exchange rate fluctuations can significantly impact payment costs. Foreign currency credit in dollar, euro and yen grew respectively by 5%, 10% and 6% year-on-year at the end of Q1 2025 ¹. Understanding these trends helps procurement teams time their payments strategically.

Batching payments can reduce per-transaction fees, especially when using traditional banking channels. However, this must be balanced against supplier payment terms and cash flow requirements. Some suppliers offer early payment discounts that may offset higher transfer costs, making faster payment methods more economical overall.

Currency hedging strategies become important for businesses with regular, predictable payment schedules. While complex hedging instruments require substantial credit facilities, simpler approaches like forward contracts can provide cost certainty for planned payments.

Leveraging technology for cost reduction

API integration for automated payments

Automating supplier payments through API integration reduces manual processing costs while minimizing errors. Modern payment platforms offer comprehensive APIs that integrate with existing procurement and accounting systems. This automation becomes particularly valuable when managing multiple suppliers across different payment schedules.

The benefits extend beyond cost savings. Automated payments provide real-time visibility into payment status, reducing the administrative burden of payment tracking. They also enable better cash flow management through scheduled payments and automated reconciliation.

Multi-currency accounts

Maintaining accounts in Chinese Yuan (CNY) can eliminate conversion costs for businesses with regular supplier payments. A large part of the expansion of cross-border bank credit to emerging markets in Q1 2025 was denominated in Chinese renminbi, reaching $45 billion ¹. This trend reflects growing acceptance of direct CNY transactions.

Multi-currency accounts allow businesses to hold, receive, and pay in multiple currencies without conversion ⁷. This capability proves particularly valuable when payment timing flexibility exists, allowing conversions when rates are favorable.

Compliance and regulatory considerations

Canadian businesses must navigate complex regulations when sending money to China. Anti-money laundering (AML) and know your customer (KYC) requirements add compliance costs that vary by payment method and provider. Government initiatives and policies are significantly shaping the digital payment environment globally ².

Documentation requirements differ between payment methods. Traditional banks often require extensive paperwork for each transaction, adding administrative costs. Digital platforms streamline this process through automated compliance checks and document storage, reducing the time and cost of regulatory compliance.

Tax implications also affect the true cost of supplier payments. Proper documentation ensures businesses can claim appropriate deductions while avoiding penalties. Some payment methods provide better audit trails and reporting capabilities, simplifying tax compliance.

Building stronger supplier relationships through efficient payments

Payment efficiency directly impacts supplier relationships. Research indicates that 35% of businesses are frustrated by high or hidden fees in international payments ⁴, and these frustrations extend to suppliers who receive less than expected.

Transparent payment processes build trust with suppliers. When suppliers receive the full expected amount quickly, it strengthens the business relationship and may lead to better terms or priority treatment during high-demand periods. This becomes particularly important in competitive markets where supplier relationships provide strategic advantage.

Consistent, reliable payments also reduce the administrative burden on both sides. Suppliers spend less time chasing payments or reconciling discrepancies, while buyers avoid payment-related production delays. These operational efficiencies translate into cost savings beyond the direct payment fees.

Case study: Real-world cost comparison

Consider a Canadian electronics retailer making monthly $50,000 payments to a Shenzhen-based manufacturer. Using traditional banking methods, they might face $150 in wire fees, 3% exchange rate markup ($1,500), and $50 in intermediary fees, totaling $1,700 per transaction or $20,400 annually.

Switching to a modern payment platform could reduce costs significantly. With market-leading FX rates and elimination of intermediary fees through local payment networks ⁸, the same transaction might cost only $250, saving $17,400 annually.

These savings become even more pronounced for businesses with multiple suppliers or higher payment volumes. The cumulative expansion in renminbi cross-border bank credit reached $373 billion in Q1 2025 ¹, indicating growing direct CNY payment adoption that can further reduce costs.

Future trends in China supplier payments

The payment landscape continues evolving rapidly. Digital wallets are forecast to be used in 61% of digital transactions by 2028, up from 50% in 2023 ³. This shift will likely extend to B2B payments, potentially offering new cost-effective options for supplier payments.

Stablecoins and blockchain technology promise near-instant global transfers, helping meet the G20 target of 75% of cross-border remittances arriving within one hour by the end of 2027 ⁴. While primarily consumer-focused currently, these technologies will likely impact B2B payments.

Open banking initiatives can surface clear, real-time data on fees, exchange rates, and transaction status ⁴, potentially revolutionizing payment transparency and cost comparison. As these technologies mature, they will provide procurement teams with better tools for optimizing payment costs.

Implementing a cost-effective payment strategy

Developing an optimal payment strategy requires analyzing your specific payment patterns and supplier relationships. Start by auditing current payment costs, including all hidden fees and exchange rate markups. Document payment volumes, frequencies, and supplier preferences to identify optimization opportunities.

Evaluate different payment providers based on your specific needs. Consider factors beyond advertised rates, including integration capabilities, compliance support, and supplier acceptance. Airwallex supports transfers to 150+ countries and regions in 60+ currencies ⁹, providing flexibility for businesses with diverse supplier bases.

Implement changes gradually, starting with a pilot program for select suppliers. Monitor actual costs and supplier feedback to refine your approach. Document savings to build internal support for broader adoption of cost-effective payment methods.

Measuring success and continuous improvement

Establishing key performance indicators helps track payment optimization success. Monitor metrics including average cost per transaction, payment processing time, supplier satisfaction scores, and payment error rates. Regular review of these metrics identifies areas for continued improvement.

Benchmark your payment costs against industry standards. With merchants paying approximately $138 billion in processing fees globally in 2022 ³, understanding where your costs fall relative to peers helps identify optimization opportunities.

Stay informed about payment innovation and regulatory changes. The digital payment market is expected to grow at a compound annual growth rate of 13.5% from 2024 to 2033 ², bringing new technologies and cost-saving opportunities.

Conclusion

Optimizing supplier payment costs to China requires a comprehensive approach considering fees, exchange rates, timing, and technology. Modern financial service platforms offer significant advantages over traditional banking methods, with potential savings reaching tens of thousands of dollars annually for regular importers.

The key to success lies in understanding your specific payment needs and selecting providers that align with those requirements. By leveraging local payment networks, competitive exchange rates, and automated processes, Canadian businesses can dramatically reduce payment costs while improving supplier relationships.

As the global payment landscape continues evolving, staying informed about new technologies and payment methods ensures your business maintains competitive advantage. With the forecasted market value of the digital payment industry reaching $32.07 trillion by 2033 ², the opportunities for cost optimization will only expand.

Take action today by auditing your current supplier payment costs and exploring modern payment solutions. The savings achieved can be reinvested in growth initiatives, providing competitive advantage in increasingly global markets. Whether you're making your first payment to a Chinese supplier or managing established relationships, optimizing payment costs delivers immediate and lasting value to your business.

FAQ

What are the cheapest ways to send money to suppliers in China from Canada?

The most cost-effective methods include digital payment platforms like Airwallex, Wise, and specialized B2B transfer services that offer rates up to 85% cheaper than traditional banks. These platforms typically charge 0.5-2% in fees compared to banks that can charge 3-5% plus poor exchange rates.

How much can Canadian businesses save by switching from bank transfers to digital payment platforms?

Canadian businesses can save up to 85% on international payment fees by switching from traditional bank wire transfers to modern fintech solutions. For a $50,000 payment, this could mean savings of $1,500-2,000 per transaction through better exchange rates and lower fees.

What should Canadian businesses consider when choosing a payment method for Chinese suppliers?

Key factors include total cost (fees plus exchange rate markup), transfer speed, payment tracking capabilities, regulatory compliance, and supplier acceptance. Airwallex offers competitive rates for sending money to China with transparent pricing and business-focused features for Canadian companies.

Are there any regulatory requirements for Canadian businesses sending money to China?

Yes, Canadian businesses must comply with FINTRAC reporting requirements for transactions over $10,000 CAD and ensure compliance with both Canadian and Chinese foreign exchange regulations. Most reputable payment platforms handle these compliance requirements automatically.

How long do different payment methods take to reach Chinese suppliers?

Digital platforms typically process payments within 1-3 business days, while traditional bank wire transfers can take 3-7 business days. Some fintech solutions offer same-day or next-day delivery for urgent payments, though this may come with premium pricing.

What are the hidden costs to watch out for when sending money to China?

Hidden costs include poor exchange rate markups (often 2-4% above mid-market rates), correspondent banking fees, receiving bank charges, and weekend or holiday processing delays. Always compare the total cost including all fees and the actual exchange rate offered, not just the advertised transfer fee.

Citations

1. https://www.bis.org/statistics/rppb2507.htm

2. https://www.globenewswire.com/news-release/2025/05/28/3089198/0/en/Digital-Payment-Industry-Report-2025-Market-to-Hit-32-07-Trillion-by-2033-Government-Initiatives-Propel-Global-Shift-to-Cashless-Transactions.html

3. https://www.merchantsavvy.co.uk/digital-payment-market/

4. https://www.thunes.com/news/top-growth-drivers-in-consumer-cross-border-payments/

5. https://www.form3.tech/news/payment-insights/key-us-payment-trends-in-2025-and-beyond-that-banks-need-to-be-aware-of

6. https://www.airwallex.com/ca/business-account/transfers/send-money-to-china

7. https://www.airwallex.com/ca/blog/ach-vs-wire

8. https://www.airwallex.com/ca/business-account/transfers/send-money-to-hong-kong

9. https://www.airwallex.com/ca/business-account/transfers/send-money-to-us