Access to US Money Transfer Market

USA Money Transfer Market

The US Money Transfer Market is one of the largest in the world, and perhaps equally coveted. In 2014, the United States sent US$ 130+ Billion worth of remittances to over 100+ countries. Gaining access to this market is one of the biggest challenges faced by Money Transfer Operators.

 


 

How do we get started with Money Transmitter Licenses?

If you are interested in having some form of money transmitter license coverage, you might consider reading the following:


 

World over regulators are squeezing money transfer companies to restrict their operational geographies. The US is no exception. As per FinCEN’s (Financial Crimes Enforcement Network) ruling FIN-2012-A001 which requires MTOs/MSBs outside the US to register with FinCEN. The core of the ruling is as under:

 

On July 21, 2011, the Financial Crimes Enforcement Network (FinCEN) published in the Federal Register a final rule on definitions and other regulations relating to money services businesses (Final Rule).1 The Final Rule amended the definition of “money services business” at 31 CFR 1010.100(ff). An entity may now qualify as a money services business (MSB) under the Bank Secrecy Act (BSA) regulations based on its activities within the United States, even if none of its agents, agencies, branches or offices are physically located in the United States. The Final Rule arose in part from the recognition that the Internet and other technological advances make it increasingly possible for persons to offer MSB services in the United States from foreign locations.2 FinCEN seeks to ensure that the BSA rules apply to all persons engaging in covered activities within the United States, regardless of the person’s physical location.

Source of FinCEN Ruling.

Merely registering with FinCEN does not absolve a foreign based MSB / MTO from work with licensed money transmitter in the US, which is a mandatory requirement for most of the US Financial Regulators. In addition to the registration requirement on the US side, the local regulator, most likely your central bank (see here for full list of Central Banks around the World) in your country might also place restrictions on how you may operate internationally.

US Money Transmitter Licenses

Money Transmitter License Rental

Many money service businesses & money transfer operators are ill advised as how to proceed forward in their pursuit to get legal coverage under a license. First and fore most, stop referring to renting a license.

Licenses are never rented out.

Never!

Ever!

So even asking discreetly “Can you find me someone who is willing to rent their money transmitter license?” is highly frowned upon.

The diagram below depicts what in my view represents the best way to get started.

Money Transmitter License Requirements

 

  • Start as an ISO (Independent Sales Organization) / Correspondent Agreement
  • Work towards becoming an Authorized Delegate
  • Start applying for your own licenses and then
  • Once you have acquired them all, let go of the authorized delegate relationship.

For those interested in pursuing a relationship with a US Money Transmitter license holder, read through the following sections, and get in touch if you would like to discuss further.

 

Contact me for more information.