What is an intermediary bank? Fees and more

When sending money abroad, you might assume only two banks are involved: yours and the recipient's. But the reality of international wire transfers is a bit more complicated than that.

Most of the time, other financial institutions, known as intermediary banks, act as middlemen and move funds from one country to another. Intermediary banks can impact both the speed and cost of your transaction, so it's important to understand what they are and how they work.

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Table of contents
What is an intermediary bank? How do intermediary banks work? Is an intermediary bank required for international wire transfers? Intermediary bank fees Make fast, secure and low cost international transfers with Wise How to find intermediary bank information? Correspondent bank vs intermediary bank: what’s the difference

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What is an intermediary bank?

An intermediary bank acts as a bridge between the sending bank and the receiving bank in an international wire transfer. When banks in different countries don't have a direct relationship, they use intermediary banks to process and route international payments.

An international intermediary bank is basically a trusted third party that makes sure your money safely reaches the right person or entity.

How do intermediary banks work?

Intermediary banks are part of an international banking network called SWIFT (Society for Worldwide Interbank Financial Telecommunication).

SWIFT helps financial institutions exchange important information about international transactions. It doesn't actually move your money but it sends the messages that tell banks where to deposit funds.

Here's an example of how intermediary banks work:

You initiate a transfer from your US bank to a friend's account in Germany Your domestic bank doesn't have a direct relationship with your friend's German bank, so it sends a SWIFT message to an intermediary bank The intermediary bank has a relationship with your friend's German bank. It receives the SWIFT message and transfers the funds to your friend's bank Your friend's German bank receives the funds and deposits the money into their account

A SWIFT international wire transfer can sometimes involve multiple intermediary banks. Each intermediary bank can add time and fees to your transaction.

If your international wire deals with less common currency pairs or countries, your transfer will most likely have to go through one or more intermediary banks.

Intermediary banks are typically large banks with a strong international presence. Citibank, Deutsche Bank, and HSBC are just a few examples of banks that often act as intermediaries because they have extensive global networks.

Is an intermediary bank required for international wire transfers?

Not always, but many international transfers need at least one intermediary bank.

You'll likely need an intermediary bank if the transfer involves multiple currencies or if you're sending money to a country that not many people send money to from the US.

You may also need an intermediary bank if your domestic bank doesn't have a strong international presence. Smaller banks typically partner with bigger banks to handle international wire transfers.

Make sure to have the following international wire transfer information on hand:

• Recipient's full name and address
• Recipient's bank name and address
• Recipient's account number or IBAN (International Bank Account Number)
• SWIFT code for the recipient's bank
• Why you're sending the transfer (required for some countries)

If an intermediary bank is required, you might also need its SWIFT code. Your bank can often help you find this information.

💡 Don’t know your bank’s SWIFT/BIC Code? Check out this handy SWIFT code checker.

That said, most of the time banks handle the communication with intermediary banks internally, so you only need to provide information about the receiving bank.

Intermediary bank fees

Here's where things can get potentially expensive. Intermediary banks usually charge for their services, and these fees can eat into the amount you're sending.

There are three main ways to handle intermediary bank fees:

Fee	Details
OUR	You (the sender) pay all fees, including intermediary bank charges. The recipient gets the full amount you send
BEN	The recipient pays all fees. All of the processing charges, including the wire transfer intermediary bank fee, are taken out of the amount they receive
SHA	You pay your bank's fees, and the recipient pays for the intermediary bank wire transfer. They also cover the receiving bank fees. This is the most common option

Fees can stack up quickly when there are intermediary banks involved - especially if there are more than one. Ask your bank about their international wire transfer intermediary bank process and fees to be prepared.

Typically, each intermediary bank can charge anywhere between 15-50 USD per transaction.

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How to find intermediary bank information?

Most of the time, it's relatively easy to find international intermediary bank information if you need it.

• Ask your bank: They'll most likely be able to tell you what intermediary banks they'll use for your international transfer
• Check with the recipient's bank: They might know which intermediary banks are often used for transfers from your bank or country
• Look at your previous transfers: If you've sent money to the same recipient before, check your old transfer details

Keep in mind that you typically don't have to know intermediary bank information. Your bank will do everything that needs to be done with the intermediary banks because they already partner with them.

Usually, you simply need to give your bank the correct information of the person or entity you're sending money to, and you're all set.

Correspondent bank vs intermediary bank: what’s the difference

Sometimes the terms "correspondent bank" and "intermediary bank" are used interchangeably, but there's an important difference:

Correspondent banks work with multiple currencies
Intermediary banks work with one currency

For you as a sender, there's virtually no difference between intermediary and correspondent banks.

If your bank needs an intermediary or a correspondent bank to facilitate international financial transactions, they already have an established financial relationship with the right institution for cross-border payments.

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Intermediary banks help your money get from your bank to the beneficiary bank in international transfers. They're sometimes also called correspondent banks, especially when there's a currency exchange involved.

Intermediary banks charge steep fees, so sending international money transfers can be costly - especially when there's more than one intermediary bank involved.

You can use Wise for high-speed, low-fee transfers. Before you make a transfer, you can see all our fees and exchange rates upfront for a simple and transparent process of sending money abroad.

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