Money transmission is the act of transmitting or transferring money or other financial instruments from one person or entity to another. This can be done through various methods such as wire transfer, cashier’s check, money order, or electronic payment systems.
Examples of money transmission include:
- Sending money to a friend or family member through a mobile payment app like Venmo or PayPal.
- Transferring funds from a bank account to a credit card.
- Purchasing a money order to pay rent or other bills.
- Sending money overseas through a foreign exchange service like Western Union.
- Using an ATM to withdraw cash from a bank account.
The name of the license for a money transmitter varies by state, but it is typically called a money transmitter license or money services business license. In order to obtain this license, a company must meet certain requirements and pass background checks to ensure they are financially stable and able to handle the responsibilities of transmitting money.
Money transmission is regulated in many countries to prevent money laundering and other financial crimes. In the United States, for example, companies that engage in money transmission are required to be licensed and registered with the Financial Crimes Enforcement Network (FinCEN).
This page was last updated on May 29, 2023.