diff --git a/htlcswitch/hop/iterator.go b/htlcswitch/hop/iterator.go
index 4d9ee95b0..aca562b03 100644
--- a/htlcswitch/hop/iterator.go
+++ b/htlcswitch/hop/iterator.go
@@ -188,53 +188,20 @@ func (r *sphinxHopIterator) HopPayload() (*Payload, RouteRole, error) {
 func extractTLVPayload(r *sphinxHopIterator) (*Payload, RouteRole, error) {
 	isFinal := r.processedPacket.Action == sphinx.ExitNode
 
-	// Extract TLVs from the packet constructor (the sender).
-	payload, parsed, err := ParseTLVPayload(
-		bytes.NewReader(r.processedPacket.Payload.Payload),
+	// Initial payload parsing and validation
+	payload, routeRole, recipientData, err := parseAndValidateSenderPayload(
+		r.processedPacket.Payload.Payload, isFinal,
+		r.blindingKit.UpdateAddBlinding.IsSome(),
 	)
 	if err != nil {
-		// If we couldn't even parse our payload then we do a
-		// best-effort of determining our role in a blinded route,
-		// accepting that we can't know whether we were the introduction
-		// node (as the payload is not parseable).
-		routeRole := RouteRoleCleartext
-		if r.blindingKit.UpdateAddBlinding.IsSome() {
-			routeRole = RouteRoleRelaying
-		}
-
 		return nil, routeRole, err
 	}
 
-	// Now that we've parsed our payload we can determine which role we're
-	// playing in the route.
-	_, payloadBlinding := parsed[record.BlindingPointOnionType]
-	routeRole := NewRouteRole(
-		r.blindingKit.UpdateAddBlinding.IsSome(), payloadBlinding,
-	)
-
-	// Validate the presence of the various payload fields we received from
-	// the sender.
-	if err := ValidateTLVPayload(
-		parsed, isFinal, r.blindingKit.UpdateAddBlinding.IsSome(),
-	); err != nil {
-		return nil, routeRole, err
-	}
-
-	// If there is no encrypted data from the receiver then return the
-	// payload as is since the forwarding info would have been received
-	// from the sender.
-	if payload.encryptedData != nil {
+	// If the payload contained no recipient data, then we can exit now.
+	if !recipientData {
 		return payload, routeRole, nil
 	}
 
-	// Validate the presence of various fields in the sender payload given
-	// that we now know that this is a hop with instructions from the
-	// recipient.
-	err = ValidatePayloadWithBlinded(isFinal, parsed)
-	if err != nil {
-		return payload, routeRole, err
-	}
-
 	// If we had an encrypted data payload present, pull out our forwarding
 	// info from the blob.
 	fwdInfo, err := r.blindingKit.DecryptAndValidateFwdInfo(
@@ -249,6 +216,61 @@ func extractTLVPayload(r *sphinxHopIterator) (*Payload, RouteRole, error) {
 	return payload, routeRole, nil
 }
 
+// parseAndValidateSenderPayload parses the payload bytes received from the
+// onion constructor (the sender) and validates that various fields have been
+// set. It also uses the presence of a blinding key in either the
+// update_add_htlc message or in the payload to determine the RouteRole.
+// The RouteRole is returned even if an error is returned. The boolean return
+// value indicates that the sender payload includes encrypted data from the
+// recipient that should be parsed.
+func parseAndValidateSenderPayload(payloadBytes []byte, isFinalHop,
+	updateAddBlindingSet bool) (*Payload, RouteRole, bool, error) {
+
+	// Extract TLVs from the packet constructor (the sender).
+	payload, parsed, err := ParseTLVPayload(bytes.NewReader(payloadBytes))
+	if err != nil {
+		// If we couldn't even parse our payload then we do a
+		// best-effort of determining our role in a blinded route,
+		// accepting that we can't know whether we were the introduction
+		// node (as the payload is not parseable).
+		routeRole := RouteRoleCleartext
+		if updateAddBlindingSet {
+			routeRole = RouteRoleRelaying
+		}
+
+		return nil, routeRole, false, err
+	}
+
+	// Now that we've parsed our payload we can determine which role we're
+	// playing in the route.
+	_, payloadBlinding := parsed[record.BlindingPointOnionType]
+	routeRole := NewRouteRole(updateAddBlindingSet, payloadBlinding)
+
+	// Validate the presence of the various payload fields we received from
+	// the sender.
+	err = ValidateTLVPayload(parsed, isFinalHop, updateAddBlindingSet)
+	if err != nil {
+		return nil, routeRole, false, err
+	}
+
+	// If there is no encrypted data from the receiver then return the
+	// payload as is since the forwarding info would have been received
+	// from the sender.
+	if payload.encryptedData == nil {
+		return payload, routeRole, false, nil
+	}
+
+	// Validate the presence of various fields in the sender payload given
+	// that we now know that this is a hop with instructions from the
+	// recipient.
+	err = ValidatePayloadWithBlinded(isFinalHop, parsed)
+	if err != nil {
+		return payload, routeRole, true, err
+	}
+
+	return payload, routeRole, true, nil
+}
+
 // ExtractErrorEncrypter decodes and returns the ErrorEncrypter for this hop,
 // along with a failure code to signal if the decoding was successful. The
 // ErrorEncrypter is used to encrypt errors back to the sender in the event that