An originating institution is the bank, credit union or payment provider that enters a payment into a payment network on behalf of the person or company making it, and the role is described in full under originating financial institution (OFI). The shorter name is common in general writing, while OFI and its ACH counterpart, the originating depository financial institution (ODFI), are the formal terms used in network rules.
In the US ACH network, the originating institution receives payment instructions from its customer, the originator, packages them into files and sends them to an ACH operator. It warrants to the rest of the network that the entries are authorised and correctly formatted, and it bears responsibility for returns and unauthorised debits. In wire transfers and SWIFT payments, the equivalent party is often called the ordering institution or the debtor agent.
The originating institution is paired with the receiving institution, which credits or debits the account of the receiver. The term is also used in anti-money laundering rules, which require the originating institution to collect and pass on accurate payer information with each transfer.