The best way to transfer money from the UK to China
There’s a reason why it can be tricky to figure out the best way to send money from the UK to China, or any international country. It’s not just that you’re too busy or that maths may not be your strong suit. Banks and other money transfer services often hide their fees.
The commission rate may look low, for example, but the exchange rate may be higher than average to make up for this, with no easy way to determine what it is in advance.
It’s worth putting in the work to find a reliable, fast and low-cost method to pay suppliers in China, or transfer money abroad for other reasons. Once it’s in place, you will continue to reap the benefits for years and even decades to come.
Read this guide to find out the best way to send money to China, and put your business on the strongest footing going forward.
Why businesses might need to send money to China
In order to expand and be successful, many UK businesses now look abroad for customers, suppliers and talent.
The rise of remote working has facilitated the employment of overseas staff, while regional headquarters have always been an important part of international business.
China has been an increasingly important trading partner for the UK in recent decades. As of late December 2021, it was the UK’s third largest source of imports and exports.
Yuan vs renminbi: What is Chinese currency called?
If you've never sent money to China before, you may get confused when you see the term ‘renminbi’.
This is the official name of the Chinese currency, meaning ‘the people’s currency’. So, what’s the difference between renminbi and yuan?
Yuan, meaning coin, is the word used most frequently in more informal settings, and it’s always the word you say with a certain amount of the currency.
It’s similar to the way that the official name for British currency is ‘pound sterling’, and an exchange bureau may say ‘we accept sterling.’ However, the cost of a certain item would always be given in ‘pounds’.
How do suppliers and employees prefer to receive funds in China?
International wire transfer, also known as telegraphic transfer, is the most common payment method. It will be familiar for employees and suppliers in China.
However, if you use this method you will bear the brunt of international transfer fees, and often an exchange rate that’s steeper than necessary. You will also have to wait up to four working days for the transfer to clear.
Some suppliers prefer to be paid using sourcing agencies, escrow services or letters of credit. These are all ways of reducing risk for the supplier, but they all involve extra fees and complexity.
Online money-transfer services are another option for businesses sending money overseas, but they also involve substantial costs when it comes to fees and exchange rates, and usually have a low upper transfer limit by business standards.
Why speed of transfer matters
Time is money, as the saying goes, and that’s definitely true for businesses.
Long wait times can cause bottlenecks in the supply chain that can be disastrous. Customers are increasingly used to extremely quick dispatch times.
It’s also important to keep employees happy with timely payments and expense reimbursements.
The cheapest and most secure way to send money to China
Luckily for companies who want to find a cheap, quick and reliable way to send money to China, there’s now a better way of transferring money across borders.
Airwallex offers global business accounts that allow you to hold money in multiple currencies. Transfers with Airwallex are fast, low-cost and involve no hidden fees.
With an Airwallex foreign currency account, you can make same-day transfers from the UK to China and pay just 0.5% above the interbank rate when converting pound sterling to Chinese Yuan. That’s over 80% cheaper than UK high street banks.
You can send money to China in one business day or less. That’s much faster than using the SWIFT network, which is commonly used for international bank transfers and takes 3-4 business days.
If you have customers paying in Chinese Yuan, you can also collect the money into your Airwallex account and hold it there, then send it to suppliers in China with zero fees. This means you avoid the fees that a standard bank account would charge you for converting the money twice.
Open an Airwallex account today
If you’re one of the many businesses looking to expand their international presence or streamline their cross-border payment systems, Airwallex is made for you.
Sign up for a free account today or click below to watch a 3-minute demo video.
Related article: The best way to transfer money from the UK to the US
Tilly manages the content strategy for Airwallex UK. She specialises in content that supports businesses in their growth trajectory.
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