OFAC screening for mass payouts, in plain language

What gets screened

Software compares the names and identifying details of your recipients, and the other parties tied to a payment, against the sanctions lists that Treasury publishes. Most recipients clear instantly. A small number produce potential matches that need a human look. Screening is not optional at scale: it is a baseline requirement for moving money in the US, and the bank behind your payouts, your sponsor bank, expects to see it running on every program it sponsors.

When screening happens

Twice, at minimum: when a recipient is first onboarded, and again before money actually moves. The second check matters because sanctions lists are updated frequently, sometimes daily. A recipient who cleared at signup can match an entry added last week, so payout infrastructure rescreens as lists change rather than trusting a one-time check done by hand.

What a potential match is

Common names match list entries all the time. A potential match does not mean your recipient is sanctioned; it means the screening software found a name close enough to a list entry that someone needs to look. The overwhelming majority of potential matches turn out to be false positives on ordinary names.

Potential match
      |
Compare available identifiers
      |
True match?
   /       \
 no        yes
 |          |
clear     escalate

How review works

A reviewer compares the details on file, things like date of birth and address, against the identifiers on the list entry. If they clearly do not line up, the match is cleared and the payout proceeds. If they do line up, or there is not enough information to tell, the case is escalated and the payment stays blocked while compliance digs in. Good screening tools make the routine clears fast, so review time goes to the handful of cases that deserve it.

What a hold means

For the recipient, a hold means their payment is paused, not cancelled. Once the match is cleared, the payout releases and moves on the normal rails. For the payer, a hold on one recipient does not stall the batch: clean payments proceed while the flagged one waits for review. A held payout is also different from a failed payout: nothing bounced, no money moved and came back, the payment simply has not been released yet.

Screening status
Review required

Payout status
Held

Reason
Potential sanctions match

Owner
Compliance

The audit trail

Screening only counts if you can prove it happened. For every payout, the record should show that the recipient was checked, when, against which list version, and how any match was resolved and by whom. That trail is what your sponsor bank and its examiners ask for, and it sits alongside the rest of your compliance record keeping, like the 1099 obligations that come with mass payouts. At spreadsheet scale this evidence is nearly impossible to keep; inside payout infrastructure it is generated automatically as a side effect of sending.

Where DiscoFi fits

Screening lives inside DiscoFi’s send flow: every transfer is checked in-line, potential matches are held with a case process attached, and the outcome lands on the same audit trail as the payment itself, so a clean batch is never waiting on a spreadsheet. Screening applies on every send, whether a batch starts in the dashboard or through the payout API.