Sending payments to China: Everything you need to know

With global payment revenue in APAC growing by 4% in 2022 [1] despite the pandemic and Europe’s digital payments tipped to scale by 15.87% from 2022-2027 [2], one thing is clear — commerce is going global.🌏 So, when you’re selling physical goods and growing fast, it’s only a matter before you need to make payments to countries like China.

Yet, without the right knowledge and solutions, making payments to China can be painful. Don’t fret; we’ve got you covered. In this article, we’ll break down the common issues businesses experience when trying to send renminbi payments to China. We’ll also settle the argument on whether you should use CNH or CNY payments, along with some tips to make the process hassle-free and affordable.

Sending payments to China

The problem with sending Renminbi payments to China

Whether you’re running a brand ready to take on the world or a household name looking to diversify operations, you’ll likely encounter some specific issues when sending payments to China. Let’s zoom in on a few common headaches:

Fiddly remittance processes: For many, sending payments to China isn’t a simple case of tapping a few buttons within your existing banking portal. Depending on the solution(s) you use and your preferred end currency, you could be tasked with converting currencies multiple times or switching between various tools and providers to get the job done. Not fun.

For example, say you ship goods from China to a European port, with the UK as the end destination. Your shipment would go through three currencies (Renminbi, Euro, and British pounds), which may require different money exchange providers and concurrent wait times.

Varied currency exchange rates and expensive processing fees: Fluctuating FX rates and expensive processing fees have become the norm for many businesses sending Renminbi payments to China. And, if you wind up with both problems, an eyewatering bill can soon follow with negative impacts on your business’s bottom line.

Slow payouts: Some providers are notorious for payouts so slow they rival snail mail, with typical services taking 2-3 days at a minimum. This problem can cause frustrating cash flow issues that keep you up at night and stifle growth. Look at it another way, the timeframe might not seem like a huge deal, but if you operate in a fast-moving market or need to place an emergency stock order, it’s easy to see how the delay could be costly.

CNH vs. CNY: Which is better for sending money to China as a business

CNH vs CNY payments to China

When trading overseas, the best way to dodge sky-high fees, long processing times, and unnecessary admin is to pay in the local currency. But there’s one issue. While the official currency of China is the Renminbi, it comes in two forms:

CNH: A.k.a., Offshore Yuan, is an offshore currency that trades outside of Mainland China. The “H” stands for Hong Kong, as the Chinese government made CNH so this region could trade with Mainland China.

CNY: A.k.a., Onshore Yuan or Chinese Yuan (¥), is an onshore currency used only in Mainland China.

Advantages of paying suppliers directly in CNY

Advantages of sending CNY to China

So you’re probably wondering which is the best option for sending renminbi payments to China. The short answer is CNY.

Here are a few reasons why CNY payments are worthwhile:

Less currency rate volatility to shield your profits 📈
Supply and demand within the free market dictate CNH’s rates. This fact makes CNH more susceptible to volatility, negatively affecting your business’s profits.

Yet with CNY, the Chinese government steps in to regulate the currency. The People’s Bank of China sets a reference rate for CNY used for onshore transactions each morning. All trading with CNY in Mainland China must do so within a 2% margin of this reference rate. This approach reduces the risk of large currency fluctuations and makes it easier to gauge costs and profit margins.

Wider CNY usage brings flexibility and fairer rates

In 2009, CNH debuted to permit the trading of RMB between China and Hong Kong and take steps towards internationalising the currency. While this trading allowance now extends to more than 30 markets, including Brazil, the UK, and South Korea, it’s not as widely traded as CNY. Also, restrictions remain.

To put this into perspective, let’s cover what working with CNH payments would look like. Due to CNH being an offshore currency, if you have CNH and want to trade in Mainland China, you’d need to exchange CNH for CNY.

Also, CNH trades globally, whereas CNY, for the most part, doesn’t. So, if you keep funds in CNH and convert them when necessary you’ll get more flexibility in where and how you transact, and it’s easier to operate.

Sending CNY is faster and more cost-effective than using CNH 🚀

The reality is that sending CNH to Mainland China can be complex, slow, and expensive, especially if you have high transaction volumes or frequencies.

Why? One reason is that the Chinese government prefers China-based money transfer services, which often makes them the easiest option for sending CNH payments.

So, you’ll have to use third-party apps such as Alipay or Weixin to broker the transfer. But there’s a catch. These providers tack on their fees and don’t always have the most favorable currency rates. Yet, you can cut out the middleman with CNY payments because it’s China’s onshore currency.

Opting for CNY payments to China is also faster than using CNH. This is due to CNH relying on the SWIFT network (Society for Worldwide Interbank Financial Telecommunication), which takes 2-3 days on CNH transactions. Yet, if you CNY send from the UK, it takes one business day or less, on average.

For example, at Sokin, we process transactions on local banking rails and use China’s local clearing house to get your money where it needs to go faster and cheaper than high street banks. This approach cuts the wait time down to the same day or +1 day.

Sokin also simplifies the money transfer process by allowing businesses to send payments directly in CNY from their Sokin accounts to recipient bank accounts.

Build strong supplier relationships 🫱🏼‍🫲🏽

China’s global trade shows no signs of slowing down. Cross-border eCommerce exceeded 2 trillion yuan ($280.55 billion) in 2022 [3]. Also, European Union Imports from China hit $657.32 billion, [4] and payment revenues in APAC for commercial cross-border payments amounted to a whopping $80 billion in the same period.

But you need to build strong ties with suppliers to take advantage of the upward trend. Sluggish payments like those you can experience with CNH payments can not only cost you late fees, it’s a fast way to damage your business’ reputation. Worse still, it can even cost your business precious production slots, making staying stocked up challenging. But these issues fall away if you switch to CNY payments with the right provider.

How to make CNY payments

Sending money to China

The old ways of sending Renminbi payments

The old yet popular ways businesses pay suppliers involve using a payment gateway like PayPal or Weixing. While the process can be easy, you’ll pay greatly. Worse still, your bill will vary depending on the FX rate and charges the provider applies.

The new and improved way of sending CNY payments

These days, sending payments to China doesn’t have to be all doom and gloom. Savvy businesses use the tried and true duo: they hold the CNH outside of China in a multicurrency account combined with a local IBAN. This way, they dodge banks’ red tape and sky-high fees while making transacting in China quick and easy. The great news is, you can too!

For example, with Sokin, you can:

Simplify payments. Convert your desired amount to CNY from USD, EUR, and GBP, and then use the CNY balance to transact to send funds to Mainland China all in one place. You can also keep cash in CNH outside of China, along with the other currencies you trade in to avoid conversions.

Stay compliant. Our banking partners use China’s Cross-Border Inter-Bank Payments System (CIPS), which facilitates clearing and settlement for RMB transactions and is now mandatory for all CNY cross-border transactions.

Get fast payouts. For example, our typical GBP to CNY transaction completes on the same day or +1 day. 💰

Supercharge growth with optimised CNY payments

As commerce becomes increasingly borderless, nailing your payment stack and using CNY is essential for long-term success. But remember, not all payment solutions are created equal. For best results, opt for a multi-currency account with an IBAN, fair rates, and no to low fees. Soon, your payments to China will run like a well-oiled machine, and you’ll reap the many rewards of trading in China for years to come.

As the saying goes, “Time is money,” so don’t wait. Skip the guesswork and open your Sokin Business account today.

[1] The 2023 McKinsey Global Payments Report – McKinsey –
[2] Europe Payments Market Size & Share Analysis – Growth Trends & Forecasts (2023 – 2028)
[3] China’s cross-border e-commerce trade value exceeds 2t yuan in 2022: report – China Daily –
[4] European Union Imports from China – Trade Economics –