Flow of Funds for Correspondent Accounts (for Remittance as a Service) – USA Only

A very quick flow of funds diagram on how remittance as a service works from the US. The PS here is the PLH (Principal License Holder).

Key:

  • PSP = Principal License Holder (the entity with the money transmitter licenses)
  • [1] Customer signs up using a Correspondent White-labelled Website [2]
  • All Client Registration, AML, KYC, etc. is done on this website [2]
  • The core of this entire flow of Funds System is the PSP TMS (or Transaction Management System) depicted by circle [3]

FOR AN ACH PULL

  • When a Customer [1] wants to pay, for example $100, the TMS [3] will send a request for the same to the ACH Operator [4]
  • The ACH Operator [4] will then send to the Bank [5] the Request to Pull the Funds [6]
  • These Funds [7] will flow to PSP Bank [8]
  • Thus completing the Customer Payment Request via ACH Pull. PSP Bank [8] will then push money [9] into Correspondent’s Bank Account [10]

FOR AN ACH PUSH

  • When a Customer [1] wants to pay, for example $100, the TMS [3] will make note of the Payment.
  • Customer’s Bank [5] will then Push the Funds Directly [11] into PSP’s Bank Account [8]
  • Thus completing the Customer Payment Request via ACH Push.
  • PSP Bank [8] will then push money [9] into Correspondent’s Bank Account [10]
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