Iranians shut out of conventional banking are turning to informal channels to pay for goods and services overseas, even though each route carries its own costs and dangers. The search for workarounds has become harder as the current US-Israeli war on Iran has tightened sanctions further.
Each alternative offers some relief from the restrictions, but none matches the safety, reliability and efficiency of a working international banking system, the account notes.
Currency exchangers and intermediary firms carry payments
One common method relies on cross-border networks of currency exchangers. These informal networks pair people who need rials inside Iran with people who need foreign currency abroad. Because those opposing needs cancel each other out, a payment can be settled without money moving directly between Iranian and foreign bank accounts.
Intermediary companies provide a similar service. A customer usually pays in rials inside Iran, after which the firm or an overseas partner arranges payment to a foreign supplier in a convertible currency, using funds held abroad. Such arrangements can close gaps in banking access, but they often bring extra fees, exchange-rate losses, delays and added complexity.
Private deals and the limits of cryptocurrency
Some Iranians skip companies entirely and make private arrangements with individuals, including people they have never met, to move money across borders. These deals can be practical when formal channels are closed, but they depend heavily on trust rather than on guarantees that can be enforced.
Reza, an Iranian IT manager in Germany who did not want to give his full name, said the risk is considerable. “The transaction involves strangers having to trust one another to conduct a deal without any legal documentation or proof,” he said. “It relies entirely on trust, and either party can back out at any time, leaving the others out of pocket.”
Ashkan Bahrami, an Iranian trade expert, said businesses have little option but to use informal exchange and remittance systems for trade. He warned that these methods expose users to lost funds, fraud and high transfer costs.
These networks are also exposed to geopolitical shocks. Some that operate through Gulf countries have been disrupted by the war, which has added another layer of uncertainty for businesses and individuals who depend on them.
Cryptocurrency offers a way to move wealth without going through conventional banks, but it has not provided full protection from sanctions. Earlier this year, the US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned several major Iranian crypto exchanges, including Nobitex, Wallex, Bitpin and Ramzinex.
Alireza Yaghoubi, chairman of the board of Iran’s FinTech Association, warned that crypto transactions can be traced. He said “very bad things can happen”, pointing to sanctions imposed on multiple Iranian wallets, whether they belonged to individuals, the Central Bank or other entities. Combined with periodic internet disruptions, the threat of sanctions makes crypto an uncertain option.
Shipping delays and a collapsing rial
For businesses importing physical goods, the difficulties go beyond payment. War-related disruption and restrictions, particularly after the US naval blockade on Iran, have complicated transport, lengthened delivery times and made it harder to predict when shipments will arrive.
Arghavan Ghazanfari, CEO of Aron Trading Group, described the strain on importers using the port of Shanghai in China, a major gateway for goods bound for Iran. “Transit time used to be 26 days. But when it stretches nowadays to 102 or even 120 days, customers are bound to reconsider importing,” Ghazanfari said. “Unfortunately, the main problem now is that our supply routes are gradually being cut off.”
Even when Iranians manage to make payments abroad and accept slower deliveries, affordability remains a problem. The rial has lost more than 10 percent of its value against the US dollar over the past month, more than 55 percent over the past year and almost 90 percent over the past five years.
There is little sign that the pressure will ease soon. With another escalation of the conflict looming and the economic outlook clouded by uncertainty, many Iranians are asking how long they can keep working around an increasingly restrictive financial system, and what that will cost them.
