How to Reduce Payment and Supplier Fraud Risk When Importing From China in 2026

The safest approach is not to rely on a single payment method or payment provider. It is to build a process that verifies who you are paying, why you are paying, where the money is going, and what happens if something changes.

For most importers, that means:

1. Verify the Chinese legal entity.
2. Confirm the supplier's bank account independently.
3. Match the payment to the contract and commercial documents.
4. Use staged payments for new or higher-risk suppliers.
5. Keep inspection and delivery controls separate from payment processing.
6. Require additional approval for beneficiary or invoice changes.
7. Have an incident-response plan before the first payment.

This matters because payment fraud does not always involve a completely fake supplier. A legitimate supplier relationship can become risky when an email account is compromised, bank details are changed, an invoice is altered, or an employee is pressured into bypassing normal approval procedures.

The FBI's Internet Crime Complaint Center recorded $2.77 billion in reported losses from Business Email Compromise (BEC) in 2024. It also recorded $785.4 million in reported losses from non-payment or non-delivery complaints. These figures are based on complaints submitted to IC3, so they do not represent every loss in the market.

The FBI specifically recommends using a secondary channel or two-factor authentication to verify requests involving changes to account information.

Before sending money, identify the company that is legally responsible for the transaction.

Ask the supplier for:

• Chinese legal company name
• Unified Social Credit Code
• Business license
• Registered address
• Legal representative
• Beneficiary name
• Beneficiary bank
• Bank account number
• Contracting entity
• Manufacturer or exporter, if different from the contracting entity

China's National Enterprise Credit Information Publicity System provides public enterprise-registration information, including company name, Unified Social Credit Code, directors or shareholders, establishment date, registered address and business scope.

You can also use the official registry directly:

National Enterprise Credit Information Publicity System

What the registry can and cannot tell you

A registry check can help establish that a legal entity exists and provide information to compare against the supplier's documents.

It does not prove that:

• the company owns a particular factory;
• the company has sufficient production capacity;
• the goods meet your specifications;
• the person communicating with you is authorized to act for the company; or
• the bank account you received belongs to the company.

Supplier verification therefore needs to continue after the registry check.

A legitimate supplier can still have a compromised email or messaging account.

Do not approve a payment simply because the request appears inside an existing email thread or messaging conversation.

For a new supplier or a sensitive change:

• Call a previously verified phone number.
• Confirm the request with another known contact.
• Use a previously agreed communication channel.
• Ask the supplier to confirm the change in a signed company document.
• Check the exact email domain and reply-to address.
• Be cautious about urgent requests to bypass normal approval procedures.

The FBI identifies compromised business email accounts and unauthorized transfer requests as common characteristics of Business Email Compromise.

A simple rule works well:

Never verify a payment change using the same communication channel that requested the change.

One of the most important controls for importers is a formal beneficiary-change process.

If a supplier says:

"We changed our bank account."

do not simply edit the beneficiary and resend the payment.

Instead:

1. Pause the payment.
2. Compare the new beneficiary with the supplier's legal entity.
3. Ask why the account changed.
4. Confirm the change using a previously trusted contact.
5. Require a second internal approver.
6. Compare the new bank details with the signed contract or other verified documentation.
7. Recheck the payment amount and currency before release.

FATF's trade-based money-laundering risk indicators specifically include late changes to payment arrangements, such as redirecting payment to a previously unknown entity.

For higher-value transactions, companies can consider additional verification steps, such as a controlled test payment where permitted by their bank and compliance requirements. A successful test payment does not prove that the supplier, goods or overall transaction is legitimate.

Payment fraud is not only about the beneficiary.

The transaction itself should make sense.

Before payment, compare:

Check	What to verify
Supplier	Legal name and beneficiary match
Contract	Parties, goods, price and payment terms
Purchase order	Quantity, SKU/product and agreed price
Invoice	Invoice number, amount and beneficiary
Currency	Contract currency matches payment currency
Incoterm	Agreed shipping responsibility
Shipment	Expected shipping date and destination
Inspection	Required inspection or quality conditions
Bank details	Account name and beneficiary information

If the manufacturer, contracting company, exporter and payment recipient are different entities, document the relationship before sending funds.

FATF identifies inconsistencies between contracts, invoices, trade documents and the actual goods as potential risk indicators. It also highlights situations where the payment arrangement or transaction structure does not make commercial sense.

For an importer, this produces a useful practical test:

Does the payment make sense when viewed together with the goods, documents, companies and shipping route?

If the answer is unclear, stop and investigate before paying.

A new supplier does not need to receive the full order value on day one.

Depending on the product, contract and applicable law, an importer may use a structure such as:

Deposit → Production → Inspection → Shipment → Balance

For example, the contract may link payment milestones to:

• signed purchase order;
• production milestone;
• independent inspection;
• agreed shipping evidence; and
• final balance conditions.

The exact percentages should be negotiated according to the transaction rather than treated as a universal formula.

Staged payments reduce the amount exposed at any one point. They do not eliminate fraud risk and do not automatically create a refund right.

For large or complex orders, also consider:

• independent pre-shipment inspection;
• cargo insurance;
• documentary trade finance;
• appropriate contractual remedies; and
• professional legal advice.

A payment platform can help process and screen a transaction. It generally does not guarantee that the goods are genuine, correctly manufactured or shipped on time.

That distinction is important.

Payment controls can help with:

• business verification;
• transaction screening;
• beneficiary information;
• payment records;
• compliance review;
• payment approvals.

Commercial controls address:

• product specifications;
• factory capability;
• quality inspection;
• shipment;
• title to goods;
• contract performance;
• refunds and damages.

If a marketplace offers buyer protection, use the eligible marketplace order and payment flow when it fits the transaction.

For example, Alibaba.com says its Trade Assurance program can provide protection for eligible orders when the buyer follows the program's required order and payment process. Buyers should check the current eligibility, exclusions, evidence requirements and claim deadlines rather than assuming every transaction is protected.

Alibaba.com Trade Assurance

For businesses making frequent cross-border supplier payments, transaction screening needs to work at scale.

XTransfer's X-Net Risk Management Infrastructure combines customer onboarding review, continuous transaction monitoring and three AI risk-control components: AI solutions, trade-network data and expert insights.

Industry-leading AI solutions

Powered by 100+ AI agents integrated into every stage of risk assessment, XTransfer Group maintains a global fraud rate as low as 0.003%.

Trade network data

A comprehensive knowledge graph covering about 30 million enterprise entities to precisely evaluate risks across diverse and fragmented trade scenarios.

Expert insights

Translate deep, real-world experience of 300+ risk and compliance experts into a systematic, robust, and resilient line of defense.

What this means for an importer

The practical value is not that AI makes a supplier "safe." Instead, automated risk assessment can add another layer between supplier onboarding, transaction review and payment execution.

That can be useful when a business makes many payments and cannot rely entirely on manual review.

However, buyers should still:

• verify the supplier independently;
• confirm beneficiary details;
• match invoices and purchase orders;
• review unusual transaction requests;
• maintain internal approval controls; and
• use inspection or contractual protection where appropriate.

XTransfer AI-Powered Risk Management & Global Compliance

XTransfer positions its supplier-payment service around B2B cross-border trade. It covers online business onboarding, document submission, compliance review and supplier payments, including payments to China and global payment capabilities.

For eligible businesses and corridors, the workflow can be useful when the main requirement is recurring supplier settlement rather than consumer remittance.

Potential advantages

• B2B-focused onboarding and payment workflow
• Business and transaction compliance review
• Support for China supplier payments
• Multi-currency collection and payment capabilities
• Online transaction management
• Risk-control infrastructure combining automated assessment and human expertise

What it does not replace

XTransfer should not be treated as:

• a product-inspection service;
• a substitute for supplier due diligence;
• a substitute for a purchase contract;
• a guarantee of supplier performance.

Its own supplier-payment workflow describes preparation of company documents, online submission and professional compliance checks before approval.

There is no universally safest payment method for every China sourcing transaction.

The right choice depends on the supplier, transaction value, corridor, currency, commercial protection and internal controls.

Payment route	Main advantage	Main limitation	Best fit
XTransfer	B2B trade-focused workflow and risk controls	Not designed for freelancers, personal remittances or digital services	Recurring China supplier payments
Traditional bank wire	Established bank relationship and controls	FX, intermediary fees and recovery can vary	One-off or larger corporate payments
Wise Business	Multi-currency administration and transparent pricing	Not a supplier-verification or trade-protection service	SMEs managing multiple currencies
Airwallex	Automation, integrations and multi-currency operations	Requires appropriate entity, setup and route eligibility	Higher-frequency finance operations
WorldFirst	China sourcing and eligible 1688-related workflows	Product availability varies by market	Eligible China/1688 sourcing
Payoneer	Vendor onboarding and batch payments	Route and recipient eligibility vary	Recurring vendor payments
Marketplace protection	Potential transaction-specific dispute protection	Protection is tied to eligible platform flows	Marketplace purchases

The key comparison should not be:

"Which provider has the lowest fee?"

Instead ask:

"Which route gives us the right controls for this transaction at an acceptable total cost?"

First order with a new Chinese supplier

Prioritize:

• legal-entity verification;
• independent communication verification;
• staged payment;
• inspection;
• beneficiary controls; and
• clear contractual remedies.

Do not make a large irreversible payment simply because the supplier offers a lower price for immediate payment.

Repeat orders from a verified supplier

Once the relationship is established, focus on operational controls:

• approved beneficiary lists;
• invoice matching;
• dual approval;
• payment limits;
• batch payments;
• reconciliation;
• periodic supplier re-verification.

At this stage, a B2B payment platform such as XTransfer, a multi-currency provider, or a corporate bank may be evaluated based on the corridor and workflow.

Large or custom manufacturing orders

Consider additional protection such as:

• independent inspection;
• documentary trade finance;
• appropriate insurance;
• staged payment milestones;
• escrow-like structures where legally available;
• legal review of the contract.

For a large first order, a small difference in FX or transfer fees should not outweigh a major difference in transaction protection.

Procurement through Alibaba.com or 1688

Where eligible, keep the order and payment inside the platform's supported flow.

For Alibaba.com, review Trade Assurance requirements before relying on its protection. For eligible 1688 sourcing, WorldFirst may be relevant depending on the buyer's country, account and supplier eligibility.

Do not move a protected transaction outside the platform simply because a supplier promises a lower fee.

Freelancer or service provider

XTransfer is generally not the appropriate route when the payment is for:

• Freelance work
• Consulting
• Software development
• Marketing services
• Digital services
• Personal remittances

Use a provider whose product and compliance framework explicitly supports business-to-individual or service payments.

Digital goods or virtual products

Do not assume a B2B physical-trade payment platform supports digital goods.

XTransfer is centered on legal and authentic physical-goods trade. Confirm the provider's current product eligibility before attempting a digital or virtual-goods transaction.

Speed matters after a fraudulent transfer.

If you suspect that payment instructions have been compromised:

1. Stop additional payments immediately.
2. Contact your bank or payment provider.
3. Request a recall or hold where available.
4. Preserve emails, invoices, contracts, chat records and payment confirmations.
5. Contact the supplier through a previously verified channel.
6. Secure compromised email or messaging accounts.
7. Review payment approvals and beneficiary records.
8. Report the incident to the relevant authorities.

The FBI advises victims of BEC to contact their financial institution immediately and request a recall of funds.

Do not continue negotiating only through the channel that may have been compromised.

XTransfer can be a payment option for eligible businesses making documented B2B payments to Chinese suppliers. Its current risk-management page reports:

• 100+ AI agents across risk assessment;
• a knowledge graph covering approximately 30 million enterprise entities;
• 300+ risk and compliance experts; and
• a reported global fraud rate as low as 0.003%.

These capabilities can add a risk-screening layer to supplier payments, but they do not eliminate the need for buyer-side controls.

For a Chinese supplier, the buyer should still verify:

legal entity → beneficiary → commercial documents → payment approval → shipment/inspection

That layered approach is more defensible than treating any payment provider as a guarantee against fraud.

Regulatory Coverage and Banking Network

XTransfer operates through regulated entities across eight major jurisdictions, including the UK, US, Singapore, and the Netherlands, with regulatory oversight involving authorities such as the FCA, FinCEN, MAS, and DNB. 

The company also works with more than 170 global financial institutions, including BNP Paribas, Visa, J.P. Morgan, DBS, BBVA, HSBC, and Bank of China, to support cross-border payment and settlement services. These institutional relationships support XTransfer's global payment infrastructure.

How can I verify a Chinese supplier before paying?

Start with the supplier's Chinese legal name and Unified Social Credit Code. Compare the official registry information with the contract, invoice and beneficiary account. Then independently confirm the payment request and assess the supplier's business scope, production capability and inspection arrangements.The official National Enterprise Credit Information Publicity System is available here:

National Enterprise Credit Information Publicity System

Is a bank transfer safe for paying a Chinese supplier?

A bank transfer can be appropriate, but it is not automatically protected or reversible. Verify the beneficiary, use dual approval, match the payment to the commercial documents and confirm any changes independently. If fraud is suspected, contact the bank immediately and request a recall where available.

What should I do if a supplier changes bank details?

Pause the payment. Treat the change as a new beneficiary instruction. Confirm the change through a previously trusted contact, obtain written documentation and require a second internal approval before releasing funds.

Does XTransfer use AI for fraud prevention?

Yes. XTransfer's risk-control infrastructure uses 100+ AI agents, a knowledge graph covering approximately 30 million enterprise entities, and insights from 300+ risk and compliance experts. XTransfer also reports a global fraud rate as low as 0.003%.

What is the safest payment method for importing from China?

There is no single safest method for every transaction. For a new supplier, a combination of verified supplier identity + staged payment + independent inspection + controlled beneficiary approval is generally more important than the payment brand itself. For large transactions, documentary trade finance or other contractual protections may be appropriate.

Is XTransfer safe to use?

Yes. XTransfer operates under regulatory oversight across 8 major jurisdictions, including the FCA (UK), FinCEN (US), MAS (Singapore), and DNB (Netherlands), and safeguards client funds separately from its operational funds. XTransfer also partners with 170+ global financial institutions, including BNP PARIBAS, VISA, J.P.Morgan, DBS, BBVA, HSBC and Bank of China, supporting secure and compliant cross-border payments.

This article is compiled from publicly available sources and interview content for informational purposes only and does not represent the official views of XTransfer. XTransfer accepts no liability for any damages arising from reliance on this content.