Banks do not necessarily maintain a direct account relationship with every other bank in every country and currency.
Correspondent banking relationships can help financial institutions make payments through institutions with which they have the required relationships.
Why does this matter to customers?
An international payment route may occasionally involve intermediary institutions. Depending on the payment arrangement, this can affect processing, information requirements or charges.
Can you always predict the route?
Not necessarily. The exact route can depend on the sending institution, receiving institution, currency and payment network.
If an international payment is particularly important or large, ask the provider for the applicable payment instructions and information about charges.
Why correspondent banking can matter
Some international payments can pass through intermediary institutions before reaching the recipient. The exact route depends on the institutions, currencies and payment rails involved.
Questions worth asking
Before sending a material payment, check the provider’s current fee information, expected delivery route and whether intermediary or recipient-bank charges may apply.