Why do I have to put up the pre-funding money?

The question in full

The question is Why do I have to put up the pre-funding money? is the first reality check for new Money Transfer Operators (MTOs). While modern APIs suggest instant movement, the global banking 'Plumbing' still operates on a delay. Pre-funding the act of placing capital in a payout partner’s account before a customer initiates a transaction is the only way to offer 'Instant' delivery.

Answer

Pre-funding money is always put up by the entity that is generating (or originating) the transaction. In this case, the solution provider is generating the transaction, but they are doing so, for you, on your behalf, as you want to be in this business. As that is the case, you will have to front the pre-funding money. No solution provider is going to put up their own capital for you to benefit from. If you were to get your own licenses in the United States, would you not have to put up the pre-funding money in the payout countries? So, same scenario here.

Why do I have to put up the pre-funding money?

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