MSB Banking Requires More Than an Operating Account
Money services businesses and money transmitters are frequently evaluated differently from ordinary commercial companies because the bank is not only reviewing the company itself. It is also reviewing the flow of third-party funds, customer profile, transaction corridors, licensing coverage and compliance controls.
We help appropriately structured MSBs identify banking and payments infrastructure suited to their transaction model.
MSB Banking Infrastructure Components
Depending on the program, an approved MSB may require:
- Operating accounts
- Settlement accounts
- Named or virtual accounts
- FBO or pooled structures
- ACH
- Fedwire
- SWIFT
- Multi-currency balances
- FX
- International payouts
- Local payout rails
- Treasury tools
- API access
- Reconciliation infrastructure
What Providers Will Examine
An MSB should expect detailed review of:
- State money transmitter licensing
- FinCEN registration
- Foreign MSB registration where applicable
- Authorized-delegate or agent relationships
- AML program
- Compliance officer
- Transaction monitoring
- Sanctions screening
- Customer types
- Flow of funds
- Source and destination countries
- Expected transaction volume
- Average ticket size
- Maximum transaction size
- Funding methods
- Payout methods
- Source of funds
- Beneficiary types
Example Flow
CUSTOMER
│
▼
COLLECTION RAIL
│
▼
MSB / LICENSED PRINCIPAL
│
▼
BANKING & TREASURY INFRASTRUCTURE
│
├── Accounts
├── FX
├── Compliance Controls
└── Settlement
│
▼
PAYOUT PARTNER / BANK
│
▼
BENEFICIARY
Licensed vs. Sponsored Models
Some companies operate under their own licensing.
Others participate through an authorized-delegate, agent or sponsored model where permitted.
The banking architecture has to match the regulatory structure. A provider that will support a fully licensed principal may not support an unlicensed technology company performing the same flow.
FBO and Pooled Accounts
Where customer funds are held in a pooled structure, banks typically require substantially more information.
They may need to understand:
- Legal ownership of the account
- Beneficial ownership of underlying funds
- Customer-level ledgering
- Reconciliation
- Safeguarding
- Funds segregation
- Permitted transaction types
- Compliance responsibility
What We Need Before Approaching Providers
We generally require:
- Flow of funds
- Transaction set
- Licensing matrix
- FinCEN registration
- Compliance overview
- Origination states
- Destination countries
- Monthly volume
- Average transaction size
- Funding methods
- Payout methods
- Required banking rails
Request an Assessment
If you are an MSB looking for banking, the fastest route is to begin with the transaction structure rather than a generic account request.