An intermediary bank is a middleman that processes your money as it moves between your bank and the recipient's bank

When you send money to another country, your bank often cannot reach the recipient's bank directly. An intermediary bank (also called a correspondent bank) sits in the middle and handles the transfer. Think of it like a postal relay: your bank sends the money to the intermediary, the intermediary checks it and forwards it to the final bank, and the final bank delivers it to the recipient.

You do not choose the intermediary bank yourself. Your bank picks one based on which banks it has relationships with and which ones serve the country you are sending money to. The intermediary bank is usually in the same country as the recipient's bank, or in a major financial hub like New York or London.

Intermediary banks exist because most banks do not have direct connections to every other bank in the world. Instead of building thousands of relationships, banks use a smaller network of correspondent banks that already have those connections. This system moves money reliably, but it adds time and cost to your transfer.

Key Takeaways

  • An intermediary bank processes your international transfer between your bank and the recipient's bank, adding one to three business days to the journey.
  • Your bank chooses the intermediary bank for you based on its existing relationships; you cannot pick a different one.
  • Each bank in the chain (yours, the intermediary, and the recipient's) may charge a fee, and these fees are often deducted from the amount the recipient receives.
  • Wire transfers and international ACH transfers both use intermediary banks, though wire transfers usually move faster.
  • Knowing about intermediary banks helps you understand why international transfers cost more and take longer than domestic ones.

How the money moves through an intermediary bank

When you initiate an international transfer, your bank sends payment instructions and the funds to the intermediary bank using a find messaging system called SWIFT (Society for Worldwide Interbank Financial Telecommunication). The intermediary bank receives the message, verifies the details, and checks that it has enough funds to forward the money onward.

Once verified, the intermediary bank sends the funds to the recipient's bank using the same SWIFT system. The recipient's bank then credits the money to the recipient's account. At each step, the banks exchange information about who sent the money, who should receive it, and how much is being transferred.

This process typically takes one to three business days, depending on the countries involved and the time zones. If a holiday falls during the transfer, or if the banks are in very different time zones, it may take longer. The intermediary bank does not hold your money permanently — it is just passing it through as quickly as the banking system allows.

Why intermediary banks charge fees

Each bank in the chain — yours, the intermediary, and the recipient's — may charge a fee for its work. Your bank charges you for initiating the transfer. The intermediary bank charges for processing and forwarding the payment. The recipient's bank charges for receiving and depositing the funds.

These fees vary widely. Your bank might charge $15 to $50 for an outgoing international transfer. The intermediary bank might charge $10 to $25. The recipient's bank might charge another $5 to $15. The total can easily reach $50 to $100 or more, depending on the banks and the amount being sent.

The recipient usually bears the cost of the intermediary and receiving bank fees. If you send $1,000, the recipient might receive $900 to $950 after all fees are deducted. This is why it matters to ask your bank upfront what fees will be charged and whether they will be deducted from the amount the recipient receives or charged to you separately.

When you might not need an intermediary bank

Some transfers do not use an intermediary bank. If you are sending money to someone at the same bank as yours, the transfer stays within that bank's system and reaches the recipient the same day or next business day, with little or no fee.

If your bank has a direct relationship with the recipient's bank, the transfer may go straight from one to the other without an intermediary. This is more common between large banks in major financial centers, or between banks in countries with strong financial ties. You will not know whether your transfer used an intermediary unless you ask your bank or see it listed in the transfer details.

Some newer services like international money transfer companies (PayPal, Wise, OFX) use different networks that may reduce or eliminate intermediary banks, though they still move money through the banking system eventually. These services often charge lower fees than traditional banks, but they may have limits on how much you can send or which countries they serve.

What information the intermediary bank needs

To route your money correctly, the intermediary bank needs accurate details about the recipient's bank. This includes the recipient's bank name, the bank's SWIFT code (an eight or eleven-character identifier), and sometimes the recipient's account number and the country where the bank is located.

If any of this information is wrong, the intermediary bank may reject the transfer or send it to the wrong place. Some banks will return the money to you; others may hold it while they try to locate the correct recipient. This is why your bank asks you to provide the recipient's full banking details before processing an international transfer.

You can find a bank's SWIFT code on the bank's website, by calling the bank, or by asking the recipient to provide it. Having the correct code before you initiate the transfer prevents delays and reduces the risk of the money going astray.

The difference between wire transfers and ACH transfers with intermediaries

A wire transfer is a fast way to send money internationally, and it almost always uses an intermediary bank. Wire transfers move within hours or one business day, making them the fastest option for international payments. Your bank charges a higher fee for wire transfers — typically $25 to $50 — because of the speed and security involved.

An ACH transfer (Automated Clearing House) is slower and usually only works for transfers within the United States. Some banks offer international ACH transfers, but these are less common and may still use intermediary banks. International ACH transfers take three to five business days and usually cost less than wire transfers.

If you need money to reach someone quickly, a wire transfer is the standard choice, even though it costs more. If you have time and want to save on fees, ask your bank whether an international ACH transfer is available to the country you are sending to.

Frequently Asked Questions

Can I see which intermediary bank my money went through?

Sometimes. If you ask your bank for the transfer receipt or details, it may list the intermediary bank's name and SWIFT code. Not all banks include this information in the receipt, so you may need to call and ask. Knowing the intermediary bank can help if the transfer is delayed and you need to trace where the money is.

What happens if the intermediary bank loses my money?

This is extremely rare. Banks use encrypted SWIFT messages and keep detailed records of every transfer. If money goes missing, your bank and the intermediary bank can trace it using the transfer reference number. Your bank is responsible for getting the money to you or the recipient, so contact your bank when ready if a transfer does not arrive within the expected timeframe.

Is there a way to avoid intermediary bank fees?

You cannot avoid them entirely if you are sending money internationally, but you can reduce them. Ask your bank upfront what all fees will be. Compare banks if you send money regularly — some charge less than others. International money transfer services sometimes charge lower fees than traditional banks, though they may not serve all countries.

Why does the recipient's bank charge a fee if I already paid my bank?

Each bank performs work and takes on risk. Your bank initiates the transfer and verifies your identity. The intermediary bank processes and forwards the payment. The recipient's bank receives the funds, verifies the details, and deposits the money into an account. Each one charges for that service, similar to how different companies charge for different parts of shipping a package.

How long should I wait before contacting my bank about a delayed transfer?

Wait at least three to five business days for a wire transfer and five to seven business days for an ACH transfer. If the money has not arrived by then, contact your bank with the transfer reference number. Your bank can check with the intermediary bank and the recipient's bank to locate the transfer and find out why it is delayed.