What Is A Money Transmitter License - Faisal Khan and Company

What is a Money Transmitter License

What is a Money Transmitter License – Basic Definition

A money transmitter license is what can be referred to as one of the basic building blocks of any money services business in the United States. You CANNOT offer your services as a money transfer company without obtaining this license.

A money transmitter license is NOT the same as a FinCEN registration.

While getting registered with the Financial Crimes Enforcement Network (FinCEN) is mandatory for any money services business, it is not enough to begin providing your services in any US state.

You will still have to apply for MT licensing to operate in each state you want to work in before you can launch.

Getting a License is Important

The money transmitter or money services business is a highly regulated industry. Companies who wish to enter this market must follow all the different rules put down by each US state, fulfill the obligations set out by Financial Crimes Enforcement Network (FinCEN) and undertake all the responsibilities that have been laid out by the different regulatory bodies in the country.

It is illegal to operate a money transfer company or provide any kind of money transmission services without a license.

FinCEN Definition of a Money Transmitter

“a person who provides money transmission services.”

FinCEN and BSA

FinCEN provides a simple but broad definition which means that if you touch or move money in any way, you fall under the definition and will need to get a license.

FAQs for Money Transfer Licensing

What qualifies as a money transmitter?

Anyone who offers services to move money from one person or place to another qualifies as a transmitter according to FinCEN and all state regulators in the US.

How much is a money transmitter license?

A money transmitter license can cost a lot of money. Depending on how many licenses you need, the cost starts from approximately $180,000 and goes upwards from there.

How do I start a money transfer business?

Starting your own money transfer business involves many steps that have been explained in detail.
1. Fulfill all the requirements for each state regulator you want to operate in
2. Apply to each state regulator
3. Get a bank account
4. Get started!

Is a money transmitter considered a money service business?

Yes, the transmission of any kind of currency is one of the businesses classified under the FinCEN definition of money services businesses.

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This page was last updated on November 12, 2020.

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