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What is the federal definition of a Money Services Business (MSB)?

A money services business (MSB) is a type of financial institution that is defined by the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) as a business that provides money transmission services or any other activity that involves the transfer of funds.

According to FinCEN’s definition, an MSB includes businesses that:

  1. Engage in the business of selling or issuing stored value or payment instruments, such as prepaid debit cards or gift cards.
  2. Engage in the business of selling or issuing checks, drafts, or money orders.
  3. Engage in the business of providing money transmission services, such as wire transfers or online money transfers.
  4. Engage in the business of providing check cashing services.
  5. Engage in the business of providing currency exchange services.

MSBs are subject to federal regulation under the Bank Secrecy Act (BSA) and are required to register with FinCEN and comply with certain reporting and recordkeeping requirements to help prevent money laundering and other financial crimes.

It’s worth noting that the definition of an MSB can vary by state, and some states may have additional requirements for MSBs that operate within their borders.

This page was last updated on January 3, 2023.