A money transmitter is a person or a company that provides money transfer services by accepting funds from one person or entity and transmitting them to another person or entity. In simpler terms, it’s a business that helps transfer money from one place to another, domestically or internationally. This term is usually used in the financial industry, and the statement is commonly used to refer to the businesses that offer financial services to their clients.
A money transmitter is often associated with a money services business (MSB), which is a broader term that refers to any business that provides financial services, including money orders, traveler’s checks, check cashing, and currency exchange. Thus, money transmitters are a subset of MSBs that specifically deal with money transfers.
To operate as a money transmitter, the business needs to obtain a money transmitter license. The license is a legal requirement that enables the business to operate within the guidelines of state and federal regulations. The license application process typically involves providing detailed information about the company’s ownership, operations, and compliance procedures. Once licensed, money transmitters must adhere to strict reporting and record-keeping requirements to prevent money laundering, fraud, and terrorist financing.
This page was last updated on February 15, 2023.