What is a Money Transmitter License?

A money transmitter license is a type of regulatory license that is required for businesses that provide money transmission services or engage in any other activity that involves the transfer of funds. Money transmitters are defined by the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) as businesses that provide money transmission services, accept and transmit funds by any means, or provide a service for the issuance, sale, or redemption of stored value, such as prepaid debit cards or gift cards.

In the United States, money transmitters are subject to federal regulation under the Bank Secrecy Act (BSA) and are required to register with FinCEN and comply with certain reporting and record keeping requirements to help prevent money laundering and other financial crimes. In addition, money transmitters are typically required to obtain a money transmitter license from the state in which they operate, which allows them to engage in money transmission activities within that state.

To obtain a money transmitter license, a business typically needs to meet certain requirements, such as obtaining a surety bond or other financial backing, demonstrating financial stability, and complying with anti-money laundering (AML) and know-your-customer (KYC) requirements. Money transmitter licenses are typically issued by state regulatory agencies, such as state banking departments or financial regulators.

It’s worth noting that the specific requirements for obtaining a money transmitter license can vary by state, and some states may have additional requirements for businesses that want to engage in money transmission activities within their borders.

This page was last updated on May 31, 2023.

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