To choose a remittance API, list your corridors and the payout method each recipient uses. Then check that every quote locks the rate, the fees and the amount received. Check that the API returns what your licence makes you show the sender, and that it handles cancellations and refunds. Last, get the licence chain in writing.
General information, not legal advice. Check current rules with your regulator and your providers.
What does a remittance API do?
A remittance API connects your sending app to payouts in other countries. It prices each transfer with a quote. It carries the sender's and the recipient's details. It pays the recipient, then reports the status back to you.
The provider behind it may pay through local banks and operators. The firm that pays the recipient is the payout partner. See what a payout partner is.
Which corridors and payout methods does it cover?
A corridor is a send country, a receive country and a payout method. Check each one you sell, not the provider's country count.
- Live today. Ask which corridors had production payouts last month.
- The method recipients use. Payout habits differ by country. In Kenya, mobile money such as M-Pesa is common. A bank-only corridor there may see low uptake.
- Own rails or a partner's. Ask which payouts the provider sends itself, and which it hands on.
- Cash pickup. Ask whether it exists, and where the rules still allow it.
Destination rules can remove a payout method. Nigeria is the clearest case in 2026. The CBN's fourth Foreign Exchange Manual took effect on 1 June 2026. A law-firm summary reports that inbound transfers must go to bank accounts, in naira, unless the CBN sets another currency. Wallets are no longer a listed channel. Cash withdrawals are capped at the naira equivalent of USD 200. Ask each provider how it applies this today.
Does the quote lock the rate and the amount received?
The quote is what your sender sees before paying. It should hold until it expires.
- What it returns. The rate, your fee, any third-party fees and the exact amount received.
- How long it lasts. Ask for the expiry time per corridor.
- What happens after expiry. A good API rejects a payout on an expired quote. It should not convert at a new rate.
- Margin shown apart. Ask whether the FX margin is shown apart from the fee.
- Who carries FX. Ask who carries the rate move between quote and payout.
For exotic pairs, ask how the provider sources each currency. See FX for the pairs that matter on African corridors.
What does your sending licence make the API return?
This is the check most comparisons skip. Your licence sets duties to the sender. The API must return the data you need to meet them. Map each duty to a field before you sign.
| Duty | The rule and its date | What the API must give you |
|---|---|---|
| Pre-payment disclosure (US) | 12 CFR 1005.31, part of the CFPB Remittance Rule. This section was last amended in May 2013. | Before the sender pays: transfer amount, fees, taxes, total, exchange rate, other fees and total to recipient |
| Receipt (US) | 12 CFR 1005.31(b)(2), last amended in May 2013 | The date funds will be available in the foreign country |
| Cancellation and refund (US) | 12 CFR 1005.34, adopted in February 2012, not amended since | A cancel call that works for 30 minutes after payment, if the money is not yet picked up or deposited. The full refund, fees included, is due in three business days. Transfers scheduled three or more business days ahead follow 12 CFR 1005.36(c) instead, last amended in June 2020. |
| Error claims (US) | 12 CFR 1005.33, last amended in June 2020 | Payout records you can pull months later. A sender can report an error up to 180 days after the disclosed date of availability. The provider must investigate within 90 days. |
| Cash-funded transfers (US) | Internal Revenue Code section 4475, for transfers after 31 December 2025. Detailed rules proposed in April 2026, not final as of October 2026. | The funding method of each transfer. The 1% tax applies to cash, money orders, cashier's checks and similar physical instruments. The provider collects it from the sender. |
| Payer and payee data (EU) | Regulation (EU) 2023/1113, applies from 30 December 2024. Articles 4 and 6. | EUR 1,000 or less, to a provider outside the EU: both names, and account numbers or a transaction ID. Above that, Article 4 adds the payer's address and ID numbers, or, alternatively, the date and place of birth. |
| Payer data (worldwide) | FATF Recommendation 16, revised 18 June 2025, in effect by the end of 2030 | Name, address and date of birth on cross-border person-to-person payments above USD or EUR 1,000. Checks on the recipient's account details. |
The US Remittance Rule duties apply only to providers above a safe harbor. Under 12 CFR 1005.30, last amended in June 2020, the safe harbor covers 500 or fewer transfers. That count must hold in the previous and the current year. Check which rules bind your own licence.
Two questions settle most of this table. Does the quote return the exact amount received, after every fee? And does every field your rules need pass through to the payout, unchanged?
Who holds the licence at each step?
A remittance usually runs on at least two licences. Yours covers the sender. Someone else's covers the payout in each destination. That may be the provider, or a bank or operator it works with.
- Ask for the licensed payout entity in each destination, named in the contract.
- Look up each one on the destination regulator's register.
- Ask which entity signs with you, and from which country.
In Nigeria, the same law-firm summary notes a limit. Banks may not run money transfer services themselves. They may act as agents of licensed operators, under the 2024 IMTO guidelines.
Who screens the sender and the recipient?
Often both you and the provider screen each transfer. Agree who does what before go-live.
- Sanctions screening. Ask which lists the provider screens against, and at which step.
- Holds. Ask what a compliance hold looks like in the API, and how long it lasts.
- Requests for information. The payout bank may ask about a transfer. Ask who receives the question, and how fast you must answer.
- Your own checks. Ask whether the provider relies on your sender checks, or repeats them.
A hold your sender cannot see becomes a support ticket. Ask for a status you can show in your app.
How reliable is it, and who answers when it breaks?
Many senders send at weekends and on holidays. Your provider's support should match those hours.
- Ask for uptime history, with the incidents behind it.
- Ask how it tells you about a rail outage, and how fast.
- Ask for an escalation contact with a named response time.
- Ask what happens to transfers already accepted when a rail goes down.
What should the docs and sandbox show?
Your developers will live in the docs. Read them before the sales call.
- Ask for a sandbox that returns every quote, status and error code.
- Check that each error code has a written meaning and a next step.
- Ask whether the sandbox can expire a quote and cancel a transfer.
- Ask for signed webhooks on every status change, with retries.
What happens when a transfer fails or the sender cancels?
A refund path has three cases. Ask the provider to show each one.
- Cancelled before payout. The sender cancels in time. You refund the full amount. The money must come back to you fast enough to meet your own deadline.
- Failed. The payout never reached the recipient. Ask for a reason code you can show the sender.
- Returned after payout. The bank or wallet sends the money back, sometimes days later. It needs its own status.
Then ask who carries the FX loss on a refund. The sender paid in one currency. The money may come back in another, at a new rate.
The statuses, webhooks and failure tests are the same as for any payout. See how to choose a payout API for Africa for the full test plan.
How do you fund it and settle?
Your funding model sets how much cash you park per corridor. Ask whether you prefund per country, or fund one balance and pay per quote. Ask for funding cut-off times, weekends included.
Ask for a daily settlement report. Every line should match your ledger by your own transfer reference. Check the coverage by country and rail before you plan balances.
What should you test before you sign?
Run each test on a real corridor, with small live amounts.
| Test | A good result |
|---|---|
| Quote, then pay | The recipient gets exactly the quoted amount |
| Pay on an expired quote | Rejected, with a clear reason |
| Cancel inside the window | Payout stopped, full amount back in your balance |
| Send without a required payer field | Rejected before money moves |
| Nigeria cash payout above the cap | Rejected or routed to a bank account |
| Pull a payout record from last month | Every disclosed figure matches the record |
FAQ
Should a remittance API lock the exchange rate?
Yes. The quote should fix the rate, the fees and the amount received until it expires. In the US, the amounts you disclose must be accurate when the sender pays, unless estimates are allowed.
Can a US sender cancel a remittance transfer?
Yes. A sender can cancel within 30 minutes of paying, if the money has not been picked up or deposited. The provider refunds the full amount, fees included, within three business days. Transfers scheduled three or more business days ahead follow a different cancel rule.
Does the US remittance tax apply to every transfer?
No. A 1% federal tax applies to transfers after 31 December 2025. It covers transfers funded with cash, a money order, a cashier's check or a similar physical instrument. Transfers from an account at a US financial institution, or with a US-issued card, are exempt.
Does a remittance from the EU to Africa carry the payer's address?
No, not at EUR 1,000 or less. Then both names and account numbers, or a transaction ID, are enough, if the payee's provider is outside the EU. Linked transfers count together. Above EUR 1,000, more payer data is added. Article 4 lists the address and ID numbers, or, alternatively, the date and place of birth.
Can a recipient in Nigeria get an inbound remittance in dollars?
No, not through a money transfer operator, as the 2026 rules are reported. Inbound transfers go to bank accounts in naira, unless the CBN sets another currency. Cash withdrawals are capped at the naira equivalent of USD 200.
For remitters
Nilos pays out in 100+ local currencies, plus SWIFT. You can fund in local currency: NGN, KES, XOF and XAF. Go live in about six weeks: a two-week integration, with compliance in parallel. See how Nilos works for remitters, or talk to our team about payouts for your corridors.