Who is the originator in a funds transfer?

In a funds transfer, the originator is defined as the sender of the payment order. This is the individual or entity that initiates the transaction by instructing their financial institution to transfer funds to another party. The role of the originator is crucial because they are responsible for providing the necessary details of the transaction, including the amount and recipient information.

Understanding this role is essential in the context of payments risk management because the originator is where the transaction begins, and effectively managing the risks associated with this stage can help mitigate potential issues downstream. The other options pertain to different aspects of a funds transfer process: the receiving financial institution is the party that accepts the funds; software used for processing payments facilitates the transaction but does not define its initiation; and an intermediary bank may facilitate the transfer but is not the point of origin for the transfer itself. Hence, recognizing the originator's position in the funds transfer hierarchy is fundamental in the study of payments and risk management protocols.