Payment terms are the #1 negotiation lever with Thai suppliers. This guide compares LC, TT, and escrow, plus typical deposit structures for OEM orders.
Standard Structures
Most Thai factories accept:
- 30% TT deposit / 70% balance before shipment — industry norm
- 30% / 70% against copy of B/L — better for buyers with QC in place
- LC at Sight — safest for both sides on orders above USD 30,000
- LC 30/60/90 days — buyer-friendly if supplier trusts you
Telegraphic Transfer (TT)
Fastest and cheapest (~USD 25–50 bank fee). Risk: buyer sends deposit before goods exist. Mitigate with:
- Third-party factory audit
- Escrow via Alibaba Trade Assurance or Payoneer Escrow
- Pre-shipment inspection before releasing balance
Letter of Credit (LC)
Bank-issued guarantee. Costs 0.5–1.5% of LC value. Suits orders > USD 30k. Requires clean documents (B/L, invoice, packing list, COO, inspection report) — even a typo delays payment. Use ISBP 745 checklist.
Escrow & New Fintech
Payoneer, XTransfer, and Airwallex now offer Thai-baht settlement with milestone escrow. Fees 0.3–0.8%, faster than LC.
Red Flags
- Suppliers demanding 100% upfront
- Personal bank accounts (must be a company account matching Ltd. name)
- Sudden bank account changes mid-order — always call to verify
Related Reading
FAQ
Is 30/70 TT safe? Yes if paired with pre-shipment inspection and a verified supplier. Never release the 70% before QC clears.
When should I use LC? Orders above USD 30,000 or with new suppliers you can't audit on-site.
Can I pay in Thai Baht? Yes — often cheaper for the supplier. Ask for a 1–2% discount in exchange.