Glossary

Intermediary bank

By Fredrik Filipsson, cofounder of Business Bank Index
Reviewed by Morten Andersen
Definition

An intermediary bank is a bank that sits between the sender's bank and the recipient's bank to pass an international payment along when the two banks have no direct relationship.

Information as of 18 December 2025Last reviewed 18 December 2025

General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.

An intermediary bank is a go between for an international payment. When your bank and the recipient's bank are not directly connected, your payment is routed through one or more intermediary banks that bridge the gap, and each can deduct a fee.

How an intermediary bank fits in a payment

When you send an international wire, your bank needs a path to the recipient's bank. If the two banks hold accounts with each other, the payment moves directly. When they do not, your bank routes the transfer through a third bank that has a relationship with both sides, or with the next bank in the chain. That third bank is the intermediary bank. It receives the funds, then forwards them on toward the destination.

Intermediary bank and correspondent bank

The terms overlap and are often used loosely. A correspondent bank holds an ongoing account relationship with another bank, while an intermediary bank is whichever bank relays a specific payment between two banks that are not directly linked. In practice a correspondent bank frequently acts as the intermediary for a given transfer. See Correspondent bank for the related arrangement.

Why it affects what arrives

A single cross border payment can pass through more than one intermediary bank, and each bank in the route may deduct a handling fee. That is one reason the amount received can be smaller than the amount sent, and why a transfer can take longer when more banks are involved. The charge option chosen at the start, such as who pays the intermediary fees, also affects the final figure. Asking your provider how many banks are in the route, and which fee option applies, helps you anticipate the cost. Routing and fees vary by provider and corridor as of 18 December 2025.

Frequently asked questions

What does an intermediary bank do?
An intermediary bank relays an international payment between the sender's bank and the recipient's bank when those two banks have no direct account relationship. It receives the funds and forwards them toward the destination, often deducting a handling fee.
What is the difference between an intermediary bank and a correspondent bank?
The terms overlap. A correspondent bank holds an ongoing account relationship with another bank, while an intermediary bank is whichever bank passes a specific payment along between two banks that are not directly connected. In practice a correspondent bank often acts as the intermediary.
Why was money deducted by an intermediary bank?
Each intermediary or correspondent bank in a payment route can charge a handling fee, so a transfer that passes through several banks can arrive smaller than it was sent. The amount depends on the route and the fee option selected when the payment was made.
How do I find the intermediary bank for a payment?
The recipient's bank usually states whether an intermediary bank and its SWIFT BIC code are needed, and your provider selects the route. If you are unsure, confirm the required intermediary details with both the provider and the recipient before sending.

Definitions, fees, features, and eligibility change and vary by region. This page was last reviewed on 18 December 2025. Confirm current terms with the provider before applying.

Related terms and guides

Correspondent bankGlossary term Nostro accountGlossary term Cross border paymentGlossary term SWIFT BIC codeGlossary term All glossary termsGlossary Compare providersBanks