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30th October 2020 | Tingyuan Zhang | China & World Sales Specialist

Online shopping from China ​​​​with international bank account

With the wide use of the Internet and e-commerce, online shopping has become an indispensable part of many people's daily life. Although there are many payment methods for overseas online shopping, the use of offshore bank accounts for overseas payments is rarely mentioned. So, what are the advantages of international bank accounts compared to other common payment methods?

For people living in China, the best choice is shopping on websites that support Alipay or UnionPay credit or debit cards. However, there are not many overseas merchants who can directly support Alipay or UnionPay as payment methods. Therefore, dual currency credit card, multicurrency credit card, prepaid card, gift card, electronic traveler' check or e-wallets are the most common ways to process overseas payments.

Credit Card

Dual currency or multicurrency credit cards are currently the most common overseas payment methods in China. However, there are certain restrictions in handling and usage of these credit cards. When applying for a Visa, Master or American Express credit card, users need to pass a credit check during the application, which may not be suitable for people without stable incomes (e.g. students, freelancers). It also has certain conditions (such as the minimum consumption amount) every year to waive the annual fee. In addition, dual currency credit cards usually only contain currency in CNY and a commonly used international currency (such as US Dollars, Euros, Hong Kong dollars, etc.). When purchasing in a different currency other than the one with the card, you may need to pay a 1.5% currency conversion fee. Multicurrency credit cards can support more types of currencies, but they may also need to pay currency conversion fees.

Prepaid Card

For people who cannot apply for credit cards, they can choose to use a prepaid card or electronic traveler's cheque for overseas payments. Prepaid cards, virtual cards, gift cards and electronic traveler's cheque are similar in nature and they must be topped up before being used. Although these types of credit cards are simple and convenient to use, they have many disadvantages. Firstly, unlike traditional credit cards, prepaid cards do not provide consumers with many protections. If the prepaid card number, password, and other information are stolen, the funds deposited by the user in the card may not be protected. Secondly, there may be various additional charges for prepaid cards. Some card issuers will charge each time when the users top up, purchase, or check the balance. Therefore, when choosing a prepaid credit card, people need to check its charging conditions. Finally, prepaid cards may not be accepted when paying for certain services. For example, Amazon's premium membership does not accept prepaid cards.

e-Wallet

​​​​​​​In addition to bank cards, people can also purchase goods from overseas merchants through electronic wallets. Before using any e-wallets, customers must bind their bank card with e-wallet in advance and deposit funds, or transfer money from the bank card into the e-wallet when payment is required. However, the payment range for e-wallets is not as wide as bank cards and fees will apply during transactions. There might also be a risk of payment rejection or account closure by mistake. Therefore, e-wallet is normally used as an alternative to credit cards. 

International Bank Account

Although international bank accounts are not widely used for overseas online shopping, they are more suitable for processing overseas payment than the payment methods mentioned above. Firstly, there is no additional charges for using an international bank account when purchasing online. If the currency that needs to be paid is different from the currency in the account, the bank will automatically convert the currency at the current exchange rate and will not charge any fees for conversion. Secondly, international bank account holders can manage their funds by remotely operating in China and can exchange currencies without being affected by China’s foreign exchange control, allowing account holders to have a good exchange rate prepared with the currency they need in advance. Finally, the process of registering an international bank account is quick and simple. As long as the conditions have been met, anyone can open an account through Internet Banking or Mobile Banking within a short period of time.

Conclusions

At present, credit cards, prepaid cards and e-wallets are still the major payment methods for people living in China to purchase goods overseas. However, it is undeniable that international bank accounts have advantages in terms of fund management and currency exchange, so they are very suitable for people who make overseas purchases frequently.