Payment Terms & FX for US Buyers of Thai Goods (2026)
Payment terms decide two things: how much leverage you keep if quality slips, and how much of your margin the exchange rate eats. Here is the structure most US importers should be running with Thai suppliers.
Standard payment structures
| Structure | Typical use | Buyer protection |
|---|---|---|
| 30% deposit / 70% against BL copy | Repeat orders, trusted factory | Moderate — payment before you inspect at destination |
| 30% deposit / 70% after passed pre-shipment inspection | New supplier, first 3 orders | Strong — ties final payment to QC result |
| Irrevocable LC at sight | Orders above ~USD 150K | Strong, but document-driven not quality-driven |
| Net 30–60 open account | Long relationships, large buyers | Strongest, rarely offered to new US SMEs |
| 100% in advance | Never for production orders | None — a red flag |
Rule: tie the balance to a passed third-party inspection report, not to a bill of lading. A BL proves shipment, not conformity.
LC vs telegraphic transfer
- T/T is cheap (USD 25–60 per wire) and fast, but reversibility is near zero once funds land.
- Letters of credit cost roughly 0.5–1.5% of value in combined bank fees and require flawless documents; a single typo triggers a discrepancy fee and delay. Worth it above about USD 150,000 or when the factory is new to you.
- Escrow works for sample and tooling payments in the USD 5K–30K range.
Currency: quote in USD or THB?
Most Thai exporters quote FOB in USD, which pushes FX risk onto them and usually adds a 1–3% cushion. If your volume is steady:
- Ask for a THB-denominated price alongside the USD price.
- Compare using the spot rate plus your bank's spread (typically 0.4–1.2% for a US business account; multi-currency fintech accounts are often cheaper).
- If THB is materially cheaper, consider a forward contract covering 60–80% of forecast 6-month spend to lock landed cost.
Never hedge 100% — production quantities move, and an over-hedged position turns into a speculative one.
Fraud controls that actually stop losses
- Verify bank details by voice call to a number you already had, never one in the email signature. Payment-diversion fraud is the most common loss in Thai trade.
- Bank account name must match the exporter name on the proforma invoice exactly.
- Confirm the company via Thai DBD registration number.
- Pay tooling and mass production from the same verified account only.
- For first orders, cap deposit exposure at what you can afford to lose.
Related reading: landed cost formula and Incoterms 2020 for buyers.
FAQ
What deposit is normal for a Thai factory?
30% is the market standard. 50% is common for custom tooling or unusual raw material, and anything above that should come with an explanation.
Should I pay the balance against the bill of lading or after inspection?
After a passed pre-shipment inspection whenever you can negotiate it — that is your only real quality leverage.
Is a letter of credit worth the cost?
Generally above roughly USD 150,000 per order, or with a supplier you have not worked with before. Below that, staged T/T with inspection-linked balance is usually more efficient.
Should I be quoted in USD or Thai baht?
Get both. USD quotes usually embed a 1–3% FX cushion; if you have steady volume, a THB price plus a forward contract can be cheaper.
How do I avoid payment-diversion fraud?
Voice-verify any bank detail change using a previously known number, and require the beneficiary name to match the exporter's registered name exactly.
Can I get open-account terms from a Thai supplier?
Sometimes after 12+ months of consistent volume, often backed by trade credit insurance on the supplier side.