Published 2026-07-22
Quick answer: most Japanese suppliers expect a bank transfer, often called T/T or telegraphic transfer. For a first order with a supplier you do not yet trust, a letter of credit protects you far better, because the bank only releases payment against correct shipping documents. Never accept bank-transfer-only terms combined with pressure to pay fast, and never act on a mid-deal change of bank details without confirming it by phone. Net terms come later, once you have a track record.
Paying a supplier in Japan is straightforward once you understand what is normal, what protects you, and which payment signals mean you should stop. This guide covers all three.
Bank transfer (T/T, telegraphic transfer). The default. The supplier sends an invoice with bank details, you wire the money. Fast and familiar, but it offers you almost no protection: once sent, a transfer is very hard to reverse. Fine for a supplier you trust; risky for a first order with a company you do not.
Letter of credit (L/C). Your bank promises to pay the supplier, but only when the supplier presents documents proving the goods were shipped correctly. This shifts risk in your favor: the money does not move until the paperwork is right. It costs more and takes more effort, which is why it is worth it mainly on larger first orders. For a new relationship where the amount would hurt to lose, an L/C is the single best protection available.
Escrow or a platform that holds funds. A third party holds your money and releases it when agreed conditions are met. Less common in direct Japanese B2B trade, but useful when neither side has a track record with the other.
Net terms (pay after delivery). Paying 30, 60, or 90 days after delivery is a privilege you earn, not a starting position. Japanese suppliers extend it once trust is established, and it is one of the strongest reasons to build a long relationship rather than treat each order as a one-off.
| Situation | Best method | |---|---| | First order, supplier you cannot fully verify | Letter of credit | | First order, small amount, verified supplier | Transfer with a modest deposit | | Repeat orders, established trust | Bank transfer, then net terms over time | | Neither side has a track record | Escrow or held funds |
The rule of thumb: the less you know the supplier, the more the payment method should protect you. As trust grows, you can move toward simpler and cheaper transfers, and eventually to net terms.
This is the most important part of paying a Japanese supplier, because payment is where fraud actually closes. Our full supplier scams guide covers the whole pattern, but these are the payment-specific signals:
Documented losses from ignoring these run into tens of thousands of dollars, sent by irreversible transfer to companies that then refused every attempt to recall the money.
The cheapest protection is confirming the company is real before any money moves. Confirm it has a 13-digit corporate number, a genuine registered address, and a Japanese-language presence. You can check any Japanese company for free with our verification search, and our step-by-step verification guide covers the full process. Paying a verified, established manufacturer is a very different risk from paying a company you found last week.
Japanese suppliers reward reliability. Buyers have won strong terms by paying promptly, communicating clearly, and treating the relationship as long-term rather than transactional. One well-known example: a buyer offered upfront payment for early batches while trust was being built, then moved to standard terms once the relationship was proven.
Practical ways to earn better terms:
Better terms follow trust, and trust follows a track record. This is also why it pays to source through suppliers you can build a real relationship with, for example a verified contract manufacturer you can return to, rather than chasing the lowest one-off price.
Most Japanese suppliers invoice in yen. Bank transfers into Japan settle through the international banking network, and your bank will handle the conversion. Be aware of one practical point: many small Japanese suppliers are set up only for domestic payment and may be unfamiliar with receiving foreign transfers or issuing English-language invoices. That is a capability gap, not a warning sign, and it is one of the frictions a good sourcing partner can smooth over.
A letter of credit, because your bank only releases payment when the supplier presents correct shipping documents. It costs more than a bank transfer but protects you where a transfer does not. Reserve it for first orders large enough that losing the money would hurt.
With a verified, established supplier, yes. The danger is bank-transfer-only terms with a company you cannot verify, combined with pressure to pay fast, since transfers cannot be reversed. Verify the company first using our free search.
T/T is telegraphic transfer, a bank-to-bank wire. It is the most common way to pay Japanese suppliers, fast and familiar, but it offers the buyer little protection once sent.
Usually only after you have built a track record. Net terms are extended to trusted, repeat customers, not offered on a first order. Paying promptly and communicating well are how you earn them.
Stop. Do not pay to the new account until you have confirmed the change by phone, using a number you already had, not one from the email requesting the change. A mid-deal change of bank details is a classic fraud signal.
This guide is general information for overseas buyers, not financial or legal advice. Confirm payment arrangements with your own bank.
Use the company verification tool to check any Japanese company by name.