Best Payout Partner Strategy for Starting a Money Transfer Company

So, you’ve done it. You’ve got a brilliant idea for a money transfer business, maybe a sleek app or a user-friendly website. You're ready to help people send money back home to their loved ones. But now you've hit the single most important operational question: How do you actually get the money into the recipient's hands?

This is where payout partners come in. Choosing the right one is the difference between a smooth launch and a frustrating series of headaches. The big question for any startup is: do you go with a payout aggregator or try to build relationships with direct banks in each country?

Let's break it down.

The "Standard Stuff": The Paperwork Everyone Asks For
First, let's get the easy part out of the way. No matter who you partner with, you'll need to prepare a stack of documents. Think of this as your entry ticket. Most banks, aggregators, and financial institutions will ask for a standard set of information to prove you're a legitimate and compliant business.

This usually falls into two main buckets:

1. Your Business Basics:

• Your company's registration documents (like Articles of Association).
• Your license to operate as a money transfer business.
• A list of who owns the company and who's on the board, along with their IDs.
• Your business tax ID number.
• An organizational chart showing who’s who.

2. Your Compliance Playbook:

• Your complete Anti-Money Laundering (AML) and Know Your Customer (KYC) policy manuals.
• Proof of your compliance training programs.
• An independent report reviewing your AML setup.
• Your latest audited financial reports.
• Details on your Compliance Officer.

Getting this package together is non-negotiable. But here’s the secret: this paperwork doesn’t help you choose a partner. It’s just the baseline. The real difference lies in what happens next.

The Real Challenge: Speed, Volume, and Funding
Once the paperwork is submitted, the real test begins. For a startup, the three biggest hurdles are:

• The Approval Timeline: How long does the partner take to review your documents (due diligence) and get you integrated into their system? Large, traditional banks can take months, sometimes even longer. As a startup, you don't have months to wait. You need to get to market.
• The Volume Question: Direct banks in specific countries often want to see that you can bring them a lot of business (transaction volume). This is a classic chicken-and-egg problem. How can you show them volume when you don't have a partner to send payments through in the first place?
• Funding Management: If you partner directly with a bank in India, another in the Philippines, and a third in Nigeria, you have to manage separate funding accounts (pre-funding) for each one. This ties up your capital and creates a logistical nightmare, especially when you don't have a predictable flow of transactions yet.

This is where the choice between an aggregator and a direct bank becomes critical.

A Smart Strategy for Startups: Start Broad, Then Go Deep For 99% of new money transfer businesses, the most strategic path is not to choose one over the other, but to choose one first.

Step 1: Get Started with a Payout Aggregator

Think of a payout aggregator as a "one-stop-shop." They have already built the relationships with dozens of banks, mobile money operators, and cash pickup locations across multiple countries.

Why start here?

• One Integration: You connect to the aggregator’s system once, and you instantly get access to their entire network. This means you can launch with payout options in 10, 20, or even 50+ countries in a fraction of the time.
• Simplified Funding: You typically only need to maintain one central funding account with the aggregator, which they then use to settle payments across all their partners. This frees up your cash and simplifies your operations immensely.

The goal here is simple: get your business off the ground. Start processing transactions, attract customers by offering a wide range of destinations, and begin collecting valuable data.

Step 2: Let Your Customers Show You the Way

Once you're operational, watch your data. Where are most of your customers sending money? You might find that 60% of your business is going to just two or three countries (we call these "corridors").

This data is gold. It tells you exactly where you should focus your energy.

Step 3: Go Direct for Your High-Volume Corridors

Now that you have significant, predictable volume going to, say, the Philippines and Mexico, you can approach direct banks in those countries with confidence. When you tell them you’re already processing '$X' thousand dollars per month to their country, they will listen.

Going direct for these key corridors can offer big advantages:

• Better Rates: By cutting out the middleman (the aggregator), you can often get better foreign exchange rates or lower fees, which means you can either offer more competitive pricing to your customers or increase your own profit margin.
• More Control: A direct relationship can sometimes offer faster service or more customized solutions.

You can keep using your aggregator for all the other countries where you have less volume. This hybrid model gives you the best of both worlds: the breadth of an aggregator and the cost-efficiency of direct partnerships where it counts most.

The Real Bottom Line: What Truly Matters in a Partner
Whether you’re working with an aggregator or a direct bank, your long-term success will depend on these three things:

• Settlement Times: How quickly does the recipient actually receive the money? In today's world, instant or near-instant is the expectation.
• Payment Failure Rates: How often do your transfers fail? A high failure rate means unhappy customers, more support tickets, and damage to your reputation.
• Quality of Support: When a payment gets stuck or something goes wrong, how good is their support team? You need a partner who is responsive, helpful, and can resolve issues quickly.

Conclusion

Choosing a payout partner isn't a one-time decision; it's a strategy. For a new money transfer business, the smartest move is to start with an aggregator to launch quickly and broadly. Use the volume you build to identify your power corridors, and then forge direct bank relationships to optimize for cost and control. By focusing on what really matters—speed, reliability, and support—you’ll be well on your way to building a successful and trusted business.

RemitSo can help you navigate this journey—from connecting with payout aggregators to securing direct partnerships in high-volume corridors. Ready to get expert guidance tailored to your business? Book a call with our team and let’s build your global payout strategy together.

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