Credit-line prefunding
Credit-line prefunding is an arrangement in which a payout partner or bank lets a sender pay out against a credit limit instead of a cash balance placed in advance. The sender settles what it used afterwards on an agreed schedule, often against collateral.
How it works
Full prefunding ties up cash in every corridor before customers send. A credit line lets the partner front the payouts and bill the sender later, up to a limit. The CPMI defines a credit limit as a limit on the credit exposure a party is willing to face, such as one participant's exposure to another for payments not yet settled.
Public filings show both forms. In its 10-K for 2025, Remitly lists collateral requirements imposed by its disbursement partners among its capital needs, alongside a $550 million revolving credit facility under an agreement dated 24 June 2025. In its 10-K for 2024, Intermex reported that its borrowings under its revolving credit facility varied with the timing of prefunding its paying agents, mainly for weekends.
A partner line moves the risk rather than removing it. The partner takes credit exposure on the sender, so it prices the line, sets a limit and often asks for collateral or a deposit. For the sender, the line is a liquidity buffer that has to be repaid on time; a missed settlement can stop payouts in that corridor.
Example
A firm pays out $1,000,000 a day in the Philippines. Prefunding three days ties up $3,000,000. With a $2,000,000 partner credit line backed by a $500,000 deposit, it prefunds $1,000,000 and settles drawn amounts daily. Cash tied up falls from $3,000,000 to $1,500,000, in exchange for the line's fees and interest.
Frequently asked questions
Is a credit line cheaper than prefunding?
It depends on the line's interest and fees against your cost of funds on the cash you would otherwise park. Compare the two per corridor, including weekends and holidays.
What happens when we reach the limit?
The partner stops paying out until you settle or add funds. Track utilisation during the day, not just at the close.
Where Polynopsis fits
Polynopsis shows how much of a payout partner's balance or credit line is left against the payouts expected, so a credit limit is not hit mid-batch.
Compared with
Related terms
Sources
- A glossary of terms used in payments and settlement systems · Committee on Payments and Market Infrastructures, Bank for International Settlements
- Remitly Global, Inc. Form 10-K for fiscal year 2025 · U.S. Securities and Exchange Commission (EDGAR)
- International Money Express, Inc. Form 10-K for fiscal year 2024 · U.S. Securities and Exchange Commission (EDGAR)
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.
About Polynopsis
Polynopsis is liquidity management software for cross-border payment companies. The name joins poly, many, and synopsis, a seeing together: one live view of money spread across many banks, payout partners, exchanges and stablecoin wallets, including money in flight, with a warning before any corridor runs dry.
Why it is called Polynopsis · About Polynopsis · Glossary · Corridor runway calculator