What is a Tri-Party Correspondent Tie-Up Agreement?

Correspondent tie-up agreements are essential in the world on money transfers. So what the heck is a Tri-Party Correspondent Tie-Up Agreement? This short video explains what a tri-party agreement is and where it is necessary. A pre-cursor to this video is to understand what a correspondent tie-up agreement is and that video you can see here: What is a Correspondent Tie-up? & Why is it Necessary?


Hello. My name is Faisal Khan. I am a banking and payment consultant. I want to talk to you today about what is called a tri-party correspondent agreement.

In a video earlier, the link is down below, you’ll be able to see what a correspondent tie-up is all about. But what happens if you want to do a correspondent tie-up from, let’s say, the United States to multiple countries in Africa? So you’ll have to do one tie-up with Nigeria, one tie-up with Kenya, one tie-up with Ghana, one with Egypt, one with South Africa and obviously all this is opening multiple fronts and can take a lot of time and effort. But in a tri-party agreement, someone may let’s say you have a company in the UK and you already have an FCA license and you already have tri-party agreements with all these countries we just mentioned. So it’ll be, it makes more sense for the US company to have an agreement with the UK company because the UK company already has all the agreements with the African countries over there. You will save a lot of time, a lot of resources and maybe, you know, you’ll get a better rate because you’re already aggregating through the UK company.

So you find, try to find an aggregator. This is for go-live and even for go-live purposes, when you are starting a new business, you don’t want to spend too much time getting into these deals. You want to go into the market ASAP. So for go-live deals, an aggregator makes a lot of sense. And if you happen to be yourself the aggregator and you’re entering a new market like, like the United States and you’re an aggregator from the UK, then you can have a tri-party correspondent agreement where the US company will have an agreement with the UK company, which already has dotted line agreements with all the countries in Africa. So that is what it a tri-party correspondent tie-up agreement looks like.

The aggregator in this sense could be a commercial aggregator, you can go to them. There are a couple of, quite a few commercial aggregators in Africa who you can tie-up, they’ll give you a single API and you can connect to them, or you may ourselves be a mini aggregator of sorts connecting and not only a mega aggregator, but also going into the primary markets yourselves. So that is something to consider when you consider correspondent tie-ups and how a three-party correspondent tie-up agreement may work for you.

If you have any questions or comments, the form is in the link below. Fill it out and we would be happy to answer. Till next time, have a good one.

This page was last updated on September 1, 2022.

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