How Banks’ Intermediary Institutions Slow Down Payments for African Freelancers

 Freelancing internationally gives African professionals the opportunity to earn in strong currencies like USD, EUR, and GBP. But one recurring challenge is delays in receiving payments. Often, payments that should arrive in days take weeks. A major factor behind these delays is the role of intermediary banks, also called correspondent banks.

In this article, we’ll explore how intermediary institutions operate, why they can slow down payments, and what African freelancers can do to navigate this system effectively. Understanding this process helps freelancers plan cash flow, avoid stress, and optimize international payment strategies.

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What Are Intermediary or Correspondent Banks?

When a freelancer receives a payment from abroad, especially from a bank in a different country, the funds often pass through one or more intermediary banks. These banks act as middlemen between the sender’s bank and the recipient’s bank.

This usually happens when:

• The sending and receiving banks don’t have a direct relationship

• The payment involves different currencies

• International regulatory compliance checks are required

For instance, if a client in the U.S. pays a freelancer in Nigeria, and the Nigerian bank doesn’t have a direct connection with the client’s bank, the payment may route through one or more correspondent banks in other countries before arriving.

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Why Intermediary Banks Slow Down Payments

Several factors contribute to delays when payments go through intermediary banks:

1. Multiple Layers of Processing

Each intermediary bank must:

• Receive the payment

• Verify the details

• Ensure regulatory compliance

• Forward the funds to the next bank in the chain

Each step adds processing time, especially if banks only process international transfers in batches or at specific times of day.

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2. Compliance and Anti-Money Laundering (AML) Checks

Intermediary banks are responsible for compliance checks:

• Screening transactions against sanction lists or high-risk countries

• Verifying sender and recipient identities

• Checking for suspicious transaction patterns

These checks are essential for security, but they can delay payments by several days if additional documentation or approval is required.

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3. Currency Conversion Complications

Payments in foreign currencies often require conversion:

• Some intermediary banks handle the conversion themselves

• Conversion is sometimes delayed to match favorable exchange rates

• Multiple conversions may occur if more than one bank handles different currencies

Each conversion step can add additional processing time, slowing down delivery.

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4. Errors or Incomplete Information

Small errors or missing details can cause significant delays:

• Incorrect account numbers or SWIFT codes

• Missing beneficiary names or address information

• Improper payment references or invoice numbers

Intermediary banks may hold funds until the issue is resolved, delaying the transfer by days or even weeks.

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5. High-Risk Countries and Sanctions

Some African countries are subject to extra scrutiny due to sanctions or perceived financial risk:

• Intermediary banks may require additional documentation for verification

• Transactions may be reviewed more thoroughly before approval

This added caution, while necessary for compliance, can slow down payments for freelancers receiving international funds.

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6. Batch Processing and Cut-Off Times

Many intermediary banks process international transfers in batches:

• Payments received after the daily cut-off time may only be processed the next business day

• Weekends and public holidays in intermediary banks’ countries add further delays

• Multiple intermediaries increase the chance of timing gaps

As a result, what seems like a simple payment can take much longer to reach your account.

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7. Communication Between Banks

• Each intermediary bank must communicate with the next to confirm receipt and forwarding of funds

• Miscommunication, verification delays, or system mismatches can hold up payments

• Sometimes payments require manual intervention if automated systems flag unusual activity

These steps are designed to prevent fraud but can extend processing times.

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How Freelancers Can Navigate Intermediary Delays

While freelancers cannot control how banks operate, there are strategies to reduce delays and improve reliability:

1. Use Banks With Direct Correspondent Relationships

• Banks with established international partnerships can receive funds faster

• Ask your bank which foreign banks they have direct links with

• Prioritize clients paying from countries with direct banking connections

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2. Provide Complete and Accurate Payment Details

• Include SWIFT/BIC codes, correct account numbers, and full names

• Ensure invoices clearly list payment references and amounts

• Double-check all details before sending to clients

Accurate information reduces the chance of intermediary banks holding payments for verification.

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3. Use Multi-Currency or Digital Accounts

• Holding accounts in USD, EUR, or GBP can reduce currency conversion delays

• Digital fintech platforms sometimes offer faster delivery by bypassing traditional intermediaries

• These accounts allow freelancers to receive international payments directly and convert funds strategically

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4. Avoid Weekends and Holidays

• Timing payments to align with business days in both countries helps reduce delays

• Consider local and international public holidays when planning invoicing and payments

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5. Communicate With Clients About Payment Methods

• Encourage clients to use platforms or banks known for fast international transfers

• Advise on correct payment details and preferred payment methods

• Early communication can prevent intermediary issues before funds are sent

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6. Track Payments Regularly

• Use transaction IDs or confirmation numbers to monitor transfers

• Follow up with both the client and your bank if payments are delayed

• Having detailed records helps resolve issues faster if an intermediary bank requests clarification

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7. Plan for Cash Flow Around Delays

• Freelancers should anticipate payment delays in their financial planning

• Maintain a buffer for operational costs to cover periods without incoming payments

• Consider splitting projects into smaller payments to reduce the risk of large delays

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Why Understanding Intermediary Banks Matters

Knowing how intermediary banks work helps freelancers:

• Set realistic expectations for payment arrival times

• Communicate effectively with clients about when funds will be available

• Plan cash flow and avoid financial stress

• Choose payment platforms that minimize intermediary involvement

By understanding the system, freelancers gain control over the timing and reliability of their income.

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Conclusion

International payments to African freelancers often pass through multiple intermediary banks, each adding layers of verification, currency conversion, and processing. These steps, while critical for compliance and security, can delay payments for days or weeks.

Freelancers can reduce delays by:

• Using banks with direct correspondent relationships

• Providing accurate payment details

• Utilizing multi-currency or digital accounts

• Timing payments around business days and holidays

• Maintaining clear communication with clients

• Tracking payments diligently

• Planning cash flow around potential delays

Understanding the role of intermediary banks empowers freelancers to receive international payments more efficiently and manage expectations with clients.

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