Payment intermediary

Payment intermediary: an organization through which money travels from the payer to the payee. An international transfer usually involves several intermediaries, even if the client sees only its own bank.

Types

• Correspondent banks. They pass the transfer along a chain of correspondent accounts.
• Payment systems and messaging networks. SWIFT, SPFS, CIPS, SEPA. They transmit payment messages or carry out settlements between banks.
• Payment service providers and aggregators. They accept payments for merchants, usually by card and online. They are rare in foreign trade settlements between companies.
• Payment agents. Under an agency agreement, they pay the beneficiary in their own name, but at the client’s expense.
• International settlements brokers. They are not part of this chain: money does not pass through them. They select an agent and a route for the payment and follow it through to execution.

Status and regulation

A bank operates under a license from the central bank of its country. A payment agent’s status depends on the country where it is registered, and its relationship with the client is based on the agency agreement. That is why the agreement and the payment documents matter more than the label.

What to check

• who exactly your counterparty under the agreement is, and in which country it is registered;
• who the money will actually go through: the agent itself or a sub-agent;
• what is written down before payment: rate, fee, execution period;
• where your money is until execution;
• which set of papers you will keep for your accountants and the bank’s currency control officer.

Where VEDmost fits in

VEDmost is a broker. Money does not pass through us, and we do not earn from a single channel. For a specific payment, we select an agent from our pool and prepare the agency agreement and the payment order: the execution period is set in the agreement, and the rate and fee in the payment order before the roubles are debited. More details: How it works.