Unable to use conventional banking for cross-border payments, many Iranians have turned to alternative channels to pay for goods and services abroad. Each workaround offers a way to navigate some restrictions but falls short of the security, reliability and efficiency of a functioning international banking system.
One common method involves networks of currency exchangers that operate across borders. This informal system matches people who need local currency in Iran with those who need foreign currency abroad, settling transactions without money necessarily moving directly between Iranian and foreign bank accounts.
Intermediary firms offer services comparable to currency exchange traders. A customer pays the intermediary in local currency in Iran, while the firm or an overseas partner arranges payment to the foreign supplier in a convertible currency using funds held abroad. Both currency traders and intermediary firms often involve additional fees, exchange-rate costs, delays and greater complexity.
Other Iranians resort to private arrangements with individuals, including people they do not know personally. Those deals rely heavily on trust rather than enforceable guarantees.
“The transaction involves strangers having to trust one another to conduct a deal without any legal documentation or proof,” said Reza, an Iranian IT manager in Germany, who did not wish to give his full name. “It relies entirely on trust, and either party can back out at any time, leaving the others out of pocket.”
The methods used, whether through companies or individuals, are informal and not the most secure. Users face risks such as lost funds, fraud and high transaction costs.