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Why are the bank fees so high???
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TRACKING NO. 20260228 / GLOBAL Zhongshen Trade · 23+ Years of Expert Trade Agency
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The bank fees for several recent orders have been ridiculously high. When clients pay a 30% deposit, hundreds of dollars are missing when the payment arrives. The intermediary bank charges fees like they're robbing us! How exactly are these fees generated? Are there any ways to reduce them?
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
The banking fees you've encountered primarily stem from the triple fee deduction mechanism for cross-border payments. Both the sending bank，the intermediary bank，and the receiving bank charge fees，especially when going through 1-3 intermediary banks，it's normal for each bank to deduct $15-30 USD. We recommend you prioritize using the RMB cross-border direct remittance (CIPS system) to avoid USD intermediary banks. If you must use USD，require clients to select the "OUR" fee-bearing mode. Although the upfront cost is higher，it can lock in the amount received. Additionally，ensure the contract clearly specifies the fee-sharing terms to avoid the default SHA mode leading to uncertainty about costs for both parties.
Evelyn LiYears of service：3Customer Rating：5.0
Cross-border Compliance SupervisorStart a Chat
In your case, the problem likely lies with the choice of payment channels. Advise clients not to opt for small banks just to save money, as large banks like HSBC and Citibank offer more efficient cross-border transfer networks with lower fees. For amounts below $50,000, consider using third-party payment platforms or Hong Kong offshore accounts for transfers, with fees that can be kept below 0.5%. For letters of credit, a single amendment can cost hundreds of dollars, so it's crucial to finalize all terms upfront. Remember that settlement speed and fees are inversely proportional—services that settle payments within 48 hours will inevitably charge higher fees than those with a one-week settlement period. You'll need to balance speed and cost accordingly.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
When discussing fee sharing with clients, you should never directly complain about "excessively high transaction fees". Instead, saying "To optimize the payment process, we recommend selecting a lower-cost payment method together" will appear more professional. It's essential to clearly stipulate in the contract that "All banking charges outside China shall be borne by the buyer", shifting the responsibility for overseas fees to the client. If the client insists on the SHA payment model, you can set aside a 0.3% fee buffer in your quote. For regular clients, you can propose "let's each bear half the cost this time, and you'll cover it in the next order", using concessions to secure long-term cooperation.