Intermediary bank fees explained
Intermediary banks can deduct fees while routing an international transfer, which is one reason the recipient may receive less than expected.
Intermediary bank fees are charges deducted while an international wire transfer is being routed between banks. This guide explains what intermediary bank fees are, why they reduce the amount received, and why international transfer fees are often hard to predict upfront.
What are intermediary bank fees on international transfers?
Intermediary bank fees are charges deducted by banks that help route an international transfer between the sending bank and the receiving bank. These banks are sometimes called correspondent banks.
Why are intermediary banks used?
Not every bank has a direct relationship with every other bank in the world. When two banks cannot settle directly, the transfer may pass through one or more intermediary banks that help move the payment across countries, currencies, and banking networks.
Why are intermediary bank fees hard to see upfront?
Intermediary fees are often deducted while the transfer is in transit. Your sending bank may show its own wire fee, but it may not know exactly what each intermediary or receiving bank will deduct before the transfer completes.
Why did the recipient receive less money?
The recipient may receive less than expected because intermediary fees are deducted from the transfer amount before it reaches the destination account. Foreign exchange spread and receiving bank fees can reduce the final amount further.
Can intermediary bank fees be avoided?
Sometimes, but not always. Fees may be lower when the sending and receiving banks have a direct correspondent relationship or belong to the same banking group. Some routes require intermediaries regardless of the bank you choose.
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FAQ
Who pays intermediary bank fees?
Intermediary fees are usually deducted from the transfer amount, which means the recipient may receive less than the amount sent.
Can intermediary bank fees be refunded?
Usually not. These fees are charged by banks involved in routing the international payment.
Can more than one intermediary bank be involved?
Yes. Some international transfers pass through more than one intermediary bank, especially on less direct routes.