Can I Rent Or Lease A Money Transmitter License?

Can an upcoming startup rent or lease a money transmitter license from someone? Is this even possible? If so, how? Is it legal to rent a money transmitter license? Find out. Here is the article about PreCash I was talking about, you can read it under the sub-heading “Authorized Delegate”


Hello my name is Faisal Khan. I’m a banking and a payment consultant. And the question I’m answering today is can I rent or lease a money transmitter license in the United States.

The long and short is no, you can do that. The state regulators have now clamped down on all such operations they deem it to be not legal if you will that companies can go to existing principal license holders or people who have money transmitter licenses and essentially rent them out. They started with something called Precash in 2013-14. There’s a link below you can read the article on that. (Here is the article about PreCash I was talking about, you can read it under the sub-heading “Authorized Delegate”)

But basically you cannot go and rent a licence off someone. It is very much looked down upon. And state regulators will chastise the licence holder and certainly will not allow the agreement to go through.

What you can do and the right word and by the way we never use the word rent a license or can I lease a license that is just frowned upon. If you’re having a conversation with someone on the telephone and you want to inquire if there’s a way to rent that licence or lease a license the right word the right nomenclature is to say is it possible to get regulatory coverage by working with you. Is it possible to get regulatory coverage by working with you or can I come under a licensing umbrella by working with you.

The main thing you want to show to a regulator is that you are associating yourself with the principal licence holder because you are bringing them business or you or you and you are subscribing to a core tenet and that they’re offering. They maybe offering payment processing which is not something you need and hence you’re doing this alliance with them; they may be offering segregated name accounts; they may be offering point of sale terminals; they may be offering ACH processing but that is the core service that you’re subscribing to and hence the alliance in which they will then be running the program for you and they’ll be called a program manager and you would essentially get regulatory coverage rather than leasing or renting a licence.

So you don’t read lease or rent a licence what you do is you partner up with an existing PLH to get regulatory coverage. I hope I was able to explain that if you have any questions please feel free to comment down below and I’ll be happy to answer them. Till next time.

This page was last updated on September 15, 2022.

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