Resources · Sourcing in China
Choosing a payment method: T/T, letter of credit, platform escrow and RMB settlement
How the common payment methods in China-Africa trade work, what they cost and what risks they carry, and how foreign-exchange policy in Nigeria and other countries affects payment.
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The most common method in China-Africa trade is T/T wire transfer (30% deposit, 70% before shipment or against a copy of the bill of lading). A letter of credit suits large amounts or first orders; platform escrow suits small amounts. Nigeria and China have a bilateral currency swap arrangement, and some banks can handle RMB settlement.
Information updated: 2026-10-03
Payment methods compared
| Method | Process | Buyer's risk | Seller's risk | Best for |
|---|---|---|---|---|
| T/T wire transfer | Deposit + balance | Supplier fails to perform after the deposit | Balance not received | Most regular orders |
| Letter of credit (L/C) | Bank pays against documents | Payment made once documents comply; quality issues are hard to pursue | Payment refused for discrepant documents | Large amounts, first orders |
| Platform escrow | Platform holds the funds | Lower | Lower | Small amounts, online purchases |
| RMB settlement | Pay in RMB through a bank | Depends on the bank channel | Lower exchange-rate risk | Long-term work with Chinese suppliers |
Foreign-exchange policy African buyers should watch
- Nigeria: imports first require a Form M through an authorised dealer bank. In October 2023 the central bank lifted the restriction that barred 43 product categories from the official FX market.
- The China-Nigeria bilateral currency swap agreement was renewed in December 2024 for three years at about RMB 15 billion. Importers can settle in RMB through authorised banks, but actual use still depends on the bank.
- Ghana, Kenya, Tanzania: normal bank wire transfers; watch exchange-rate swings and bank charges.
Whatever the method, check that the receiving account name matches the contracting party when you pay.