In the money transfer industry, a correspondent payout refers to the process of paying out funds to a recipient through a correspondent bank or a money transfer operator (MTO). This can occur when the sender’s bank or the MTO does not have a direct relationship with the recipient’s bank or the recipient’s preferred payout option. In such cases, the funds are sent to a correspondent bank or an MTO that acts as an intermediary.
The correspondent bank or the MTO then pays out the funds to the recipient either through a traditional bank transfer or other payout options such as cash pickup, mobile money, and other digital options. This process can add additional fees and take longer for the recipient to receive the funds.
If you don’t know what a tri-party correspondent tie-up is, may we request you watch these two videos? They explain the concept of what correspondent tie-up agreements are – very well.
This page was last updated on June 20, 2023.