by Tekle Sebhatu

Question:

We are a small retailer in the U.S. looking for suppliers in China, but most of them will only do payment through Western Union or Bank Transfer. Is this normal? How can I reduce my risk of fraud?

Answer:

Dear Kicks: Whether it is normal or not depends on the type of business relationship that you have with your supplier. Western Union, Money Gram and First Data Corporation are all reputable financial services companies that provide service to send or receive money around the world. If you have any doubt on the legitimacy of the supplier then consider your other options including finding another supplier. It all has to do with how confident you are in your supplier and not how the money is transferred. Focus on building trust between you and your supplier and not which institution will transfer the funds, which I think is secondary.

By keeping you eye on the ball (supplier) and not on the messenger (money transferring organization) can certainly help reduce your risk of dealing with fraudulent suppliers.