Correspondent vs Agent (Authorized Delegate)


The objective of this write-up is to explain the US-to-your-Country remittance solution for those who hold money transmitter licenses and can offer to potential partners (be it in the form of an Authorized Delegate or a Correspondent/ISO).


Remittances from the US represent a huge opportunity for anyone engaged in this vertical.

The United States is one of the most strictly regulated markets in the world. Access to this market is extremely subjective and restricted. MTOs (Money Transfer Operators) who access the market, without a money transmitter licenses alliance, face the wrath of the FinCEN (Financial Crimes Enforcement Network), who do not differentiate between businesses in the US or businesses outside the US as far as money transmission is concerned.

If any external entity is picking up US customers, they need to have the appropriate US money transmitter licenses for the states in which they are doing business. The path toward MTL (Money Transmitter Licenses) shall not be discussed in this write-up.

Legally speaking there are three options available to do business in the US with a licensed money transmitter:

  • ISO – Independent Sales Organization
  • Authorized Delegate (Agent) Program
  • Payout Correspondent for a Principal Licensee’s related product or service

See Also:

Correspondent & Authorized Delegate – Comparison Matrix

In order to better understand the difference between both programs, please refer to the following table below.

DescriptionAuthorized Delegate(Agent Program)Correspondent Payout(ISO Program)
How long does it take to sign-upAn authorized delegate takes about 3-6 months of work before one can become an authorized delegate.It takes about 1-2 weeks.
Is approval required for each State in which the Principal Licensee is licensed?Yes. The approval process can be from 14 days to 6 months, depending on the State, the application, the process flow, etc.No. No prior approval and/or OK is required from any state.
Can a state regulator deny your application?Yes.No/Not-Applicable.
Is there a re-course for re-application?Yes, but it will reset the clock and require additional money.Not-Applicable.
Is FinCEN registration required?YesNo.
Are you subject to a background check?YesYes
Is Due-Diligence conducted on your companyYesYes
Is there any one-time feesYes, for becoming an authorized delegate, there is a hefty one-time fee imposed by each State, as well as non-recurring fees by the Principal Licensee (well in excess of US$ 50,000)Yes, but it is usually sub $ 5,000 (varies from MTO and Corridor – see below). It can be lower, can be higher, depending on who is in the market right now.
Is surety bonding requiredYesNo. You are covered under Principal License Holder’s existing surety bonding.
Is net worth required to be increasedYesNo. You are covered under Principal Licensee’s existing net worth.
Is E&O insurance requiredYes.No. You are covered under Principal Licensee’s existing insurance plan.
Is access to individual banking required in the USYes. Access to banking is required and in some cases, FBO (For the Benefit Of) Accounts in favor of the Principal Licensee may be required.Depends. It’s optional, but not a pre-requisite.
Are you required to have your own front-end application/web?Yes.No.
Will the web/app have to be co-brandedYes. Mandatory now.Yes.
Will you be responsible for all the disclosure statements?Yes. You have to be responsible for all disclosure statements.No. The ISO Program Manager will be.
Will you have to file reports to the State regulatorNo. But you will have to prepare sub-reports that we, Principal Licensee will file to the State regulator.No. The ISO Program Manager will file.
Is there a monthly recurring charge?Yes, depending on the type of program you are being enrolled into, the monthly recurring charge can be anywhere from US$ 7,500 per month to US$ 25,000 per month.Yes, but it is restricted as follows (see below section for financials)
Is there a fee for an APIYes, there is a yearly fee for API (this is API for the Principal Licensee, to be  the merchant on record). This is for Principal Licensees KYC, AML, OFAC checking, etc.Yes, but depending on the product arrangement, ISO Program Manager can subsidize this fee.
Are we required to have an AML program?YesYes
Are we required to have an AML Officer on board?YesYes
Are we required to have a KYC programYesYes
Are we required to have a Compliance Officer onboard?YesNo
Do we have to be a licensed MTO in the beneficiary (payout country)YesPreferably yes.
Do we have to keep track of all the payout locationsYesYes
Do we have to keep a reserve with youYes, a floating reserve must be held till such time the payment is made out to the end beneficiary. Varies from anywhere from US$ 25,000, to US$ 100,000 (usually US$ 50,000)Yes, a floating reserve must be held till such time the payment is made out to the end beneficiary.
Can I do multiple remittance corridors?No. Each new corridor will have to be approved, both by the Principal Licensee and the State Regulator.Yes.
Who spends money on marketingYou do.You do. Though caution, in the strict legal sense, you will be marketing the ISO Program Manager’s product, i.e. the URL of the site.
Is there a minimum revenue I have to generate?Yes (eventually the state regulator will look at the numbers and see what you are making, and if the numbers are weak, your authorized delegate status would be canceled).Yes
Do you offer an APIYes, additional yearly charge.Yes. Free.
Can customization be done?Yes. You pay for it, and for any approval if required.Yes, subject to internal approval.
Who handles Customer SupportYou do.We both do.
Will you offer exclusivity?Exclusivity is not offered.Exclusivity is not offered.
How long to go live once we sign-up?About 6-12 weeksBetween 2-4 weeks
Who makes money on the FXYou do. We do not get involved in the FX rate.You do. ISO Program Manager usually does not get involved in the FX rate. If you have a tie-up, then they would make the money on the FX.
Do you have a reserve requirementYes, see below: The reserve would be calculated at the following rate:To start out with US$ 10,000Once 30 calendar days of live transactions have been set, it would be set as follows:Last 30-Days Daily Average x 5 Days Reserve or US$ 10,000 (whichever is greater).  Yes, see below: The reserve would be calculated at the following rate:To start out with US$ 5,000Once 30 calendar days of live transactions have been set, it would be set as follows:Last 30-Days Daily Average x 3 Days Reserve or US$ 5,000 (whichever is greater). 

Key Principles

As a correspondent payout partner, you understand and acknowledge the following:

  • That all clients, legally belong to Principal Licensee. The transactions are owned by Principal Licensee.
  • The money transaction flow has to be such so that all flow of funds (and Bitcoin, if utilized) have to be through Principal Licensee’s bank account.
  • The product &/or service that the Agent is marketing or extending out, has to tie-in to the core product &/or service of the principal licensee. The same is true for the correspondent payout partner.


  • A short 1-page summary of your business plan
  • Need to have a detailed flow of funds and flow of coins (if Bitcoins are being utilized).
  • What’s your go to market date? This is perhaps the most important question? Is it in 60 days? 90 days? 6 months? 1 year?
  • Do you have adequate capital/funding to sustain an agreement engagement with Principal Licensee? Or is it something that you will be raising later on?
  • How do you plan on marketing to the diaspora in the US?
  • Do you have any indication on the market size? If so, that would need to be shared.
  • What is the anticipated volume of business you intend to pick up from the US? 12 months of projected financials (revenue & transactions) – mandatory
  • Average value of each transfer (transaction)
  • States in which you want to do business in?
  • A brief project plan (timelines)
  • A clear understanding of the physical locations and/or virtual locations you may be requiring. (optional)
  • Do you have an AML policy in place? If so, please share the document.
  • Do you employ a KYC process during payout? If so, please share the process.
  • Do you have a full-time anti-money laundering specialist on board?
  • Do you have an AML system in place? If so, please provide brief details.

Based on the information supplied, Principal Licensee or ISO Program Manager will take between 3-5 working days and revert back to you with any questions or clarifications. There is usually a back-and-forth, to modify the flows and hopefully they will have a finalized version of the flows with the least amount of iterations. 

This page was last updated on May 31, 2023.

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