Before the Deposit Leaves, Check the Name on the Account

What the Check Actually Proves

A telegraphic transfer is an instruction, not a negotiation. Your bank debits the account, sends a message through the SWIFT network, and the receiving bank credits whichever account carries the name and number you gave. Nobody on either side compares that name to a factory gate.

That is why a first payment is the most exposed moment in a China order. The goods do not exist yet, the contract is a proforma invoice, and the money is gone in a day or two. If the account belongs to somebody else, the recovery route runs through a police report, a freezing order and a civil claim, which in practice means months and a lawyer in a city you have never visited.

Prevention is administrative. It takes a licence, a public database and ten minutes at a bank screen. Everything below is about those ten minutes, because they are the only part of the transaction you fully control.

Three Names That Have to Line Up

A Chinese company carries a licensed name, usually a trade name, and a bank account name. Only the first and the third are legal facts.

• Licensed name. The full name on the business licence, ending in Co., Ltd. or its Chinese equivalent. This is the only name a bank in China will accept as an account holder.
• Trade name. What the company calls itself on a website, a booth or a catalogue. Often shorter, sometimes in English, and never sufficient on a wire.
• Account name. The beneficiary field. It has to equal the licensed name, character for character.

The mismatch appears in a predictable way. A supplier quotes as Sunrise Lighting, invoices as Sunrise Lighting, and then sends bank details for Zhongshan Sunrise Lighting Co., Ltd. That is usually innocent: the trade name is a brand and the licensed name is the company. It becomes a problem only when nobody checks, and the payment goes to a third name that belongs to neither.

Ask for the licence as a photograph taken today, not a PDF from 2019. Read the name against the proforma invoice header. Then read it again against the beneficiary field. Three strings, one sitting, no shortcuts.

The Four Account Types You Will Be Quoted

Chinese exporters hold several accounts and quote whichever suits the order. None of the four below is suspicious on its own, but they carry very different amounts of protection.

• The renminbi account. Held domestically for domestic settlement. Cross-border trade in renminbi is possible and has grown, but you will be quoted a price in renminbi and the exchange risk moves to the supplier.
• The foreign currency account. A USD or EUR account at a domestic Chinese bank, opened under the same licensed name. This is the default for export orders and the easiest to check, because the account name is the licence name.
• The offshore account. Many Chinese exporters hold a Hong Kong company with a Hong Kong bank account. Legitimate and very common. It is also where the name check stops working, because the Hong Kong entity does not share the mainland factory's name and the ownership link is a document you have to request.
• The personal account. An account in the name of a manager, a salesperson or a relative. Never for a company order. There is no company behind the name, no invoice trail, and no route to a refund that does not run through that individual's goodwill.

The pattern worth watching is a quotation from one entity and bank details from another, with the explanation arriving in the same email. Explanations are cheap. Stamped authorisations are not.

The Ten Minutes

The check runs in a fixed order, and each step is short.

• Get the licence as a photo. A phone photograph of the framed original, taken on the office wall, is harder to fabricate than a PDF. Read the licensed name and the 18-digit code off it.
• Run the code. The National Enterprise Credit Information Publicity System at gsxt.gov.cn returns the registered name, legal representative, registered address, establishment date and current status. If the licence and the database disagree, the licence is not current.
• Compare three strings. Licensed name, invoice name, beneficiary name, character by character. A missing Co., Ltd. is a failed check, not a formatting quirk.
• Ask your own bank. Some corridors support a beneficiary name verification before release. Where the service exists it is the only independent confirmation you will get, and it costs a phone call.
• Call the number on the licence. Not the number in the email signature, which an impersonator controls. Ask for the finance contact and read the account number back to them.

A supplier who cannot pass these five steps inside a day is not necessarily dishonest. The order is simply not ready to be paid, and saying so out loud is cheaper than discovering it afterwards.

When a Third-Party Account Is Legitimate

Three situations produce a payee that is not the contracting party, and all three are ordinary in Chinese export trade.

• An export agent. A factory without export rights sells through a trading company that holds them. The contract is with the factory, the invoice and the customs declaration are in the trading company's name, and the payment follows the invoice.
• Group treasury. A manufacturer with several subsidiaries collects into one holding company account. Common above a certain size.
• Factoring. The supplier has sold the receivable and instructs you to pay the finance company. Rare on first orders and always documented.

In all three cases the test is the same: a stamped authorisation. Ask for a letter on company letterhead, carrying the company seal, naming the account holder, the bank, the account number, the invoice numbers and the amount, signed by someone whose name appears on the public record. A letter that arrives as an email attachment without a seal is a sentence, not an authorisation.

The fraud that costs buyers most is not a fake factory. It is a genuine order where the bank details change by email two days before the balance falls due. Treat any change of account details as a new supplier, whatever the history between you.

Red Flags, in the Order They Matter

Ordered by how often they precede an actual loss, not by how alarming they look.

• Bank details that change mid-order. The strongest single signal there is. Verify by phone on a number you already had, never on a number supplied with the change.
• An account name that is a person. Tolerable for a sample fee of a few hundred dollars, never for a deposit on production.
• A different province. A factory in Guangdong paid into an account two provinces away needs an explanation that survives a phone call to the licence address.
• A request to split the payment. Two or three accounts for one invoice breaks the paper trail and matches the pattern of schemes that move money before anyone can freeze it.
• Urgency attached to the account rather than the goods. Production schedules create urgency about deposits. Nothing about a bank account should be urgent.
• A new finance contact on a messaging app. Staff changes are normal. A new contact who immediately sends account details is not.

None of these proves fraud. Each one justifies stopping for an hour, and an hour is a small price against a deposit that will not come back.

What to Write on the Wire, and What to Keep

The payment message carries information you will need months later. Chinese banks require a purpose of payment before foreign currency can be credited, and the supplier's finance department needs the invoice reference to match the receipt against the right order. Put the goods description, the proforma invoice number and the order reference in the remittance field. Vague entries like goods payment produce a phone call from a bank officer and a delay of days.

Decide the charge code before you send. Under SHA the sender pays its own bank and the receiver pays everything after that; under OUR you carry the intermediaries as well. On a small sample payment the difference is a visible share of the amount, so agree which one the quotation assumed rather than discovering it on the debit advice.

Then keep four documents: the SWIFT confirmation from your bank, the stamped proforma invoice, the stamped authorisation letter if a third party was paid, and the supplier's credit advice showing the funds landed in the named account. That last one is what you reach for if the supplier later says the deposit never arrived.

None of this replaces a contract, and a contract with a Chinese supplier is worth having in Chinese with an English translation attached. But the account check is the part that stops money travelling in the wrong direction, and it costs attention rather than money.

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