Yes, you do. If you’re licensed outside US and pick up customers within the United States without a money transfer license, you’re violating a US law.
Yes, that’s right. The US government makes no distinction between money transfer operating within the country and money transfer companies licensed outside the US, but picking up US customers.
According to FinCEN, companies licensed outside the US but picking up US customers will be classified as money services business. Thus, they would be required to obtain a money transfer license in the United States.
Resource for Money Transmitter License Application on each US State
Shipkevich PLLC is a renowned law firm in the United States. They have a very specific domain called Money Transmitter Law and it provides detailed information around the money transmitter industry.
What is cool about this website is the interactive US Map that they have, that allows you to obtain information on each and every financial regulator that grants the money transmitter license for that state.
For example when you select Florida, the following pops-up:
What are the money transmitter license requirements? Registering as a transmitter in the state of Florida requires the following fees and documents: Sample authorized vendor contract, if applicable Sample form of payment instrument Copy of financial audit report for most recent year (and parent company’s) Must maintain federal registration as MSB Documents demonstrating business maintains federal registration as a MSB Fingerprint cards + $43.25 fee per person IRS Employee ID number (FEID) Contract person info Date and state of incorporation or formation Certificate of good standing from same state Organizational chart Parent and subsidiary SEC filings, stock ticker Documents indicating other states where business is registered as an MSB FinCEN registration List of non-MSB services List of officers, directors, members, sole proprietors, controlling shareholders, and responsible person; biographical summary forms Website URL Registered service of process agent Criminal conviction and investigation disclosures Regulatory action disclosures Civil Litigation Disclosures Bankruptcy or Surety bond cancellation disclosure Informations for accounts through which business will conduct activities Date of fiscal year end Audited financial statements Year projections of transmission values (multiplied by 2% to determine surety level) Minimum net worth of $100,00 + $10,000 for each additional location, not amounting to more than $2,000,000 $376 application fee
What are the general bonding requirements? Bonding requirements vary depending on business projections of transmission volumes, multiplied by 2% to determine surety level. Volumes between: $0 to $50,000: $50,000 $50,001 to $100,000: $100,00 $100,001 to $150,000: $150,000 $150,001 to $200,000: $200,000 $550,001 to $600,000: $600,000 $1,950,001 to $2,000,000: $2,000,000
You would be surprised how many people would think that if you go to FinCEN’s website and register, you are now licensed and have what you believe to be money transmitter licenses for your money services business.
Not true.
A FinCEN registration is NOT a license. In fact, there is no federally issued money transmitter license.
Here is a video I recently did on this subject that explains it in detail.
The Department of Banking just canceled the money transmitter license of a Florida, sole-proprietor owned Money Services Business (MSB). You can read the short-order announcement below.
Money transmitter licenses are necessary for businesses that are providing financial services in the United States. According to FinCEN guidelines, you may be classified as a money services business, or MSB, if you are:
” (1) Currency dealer or exchanger. (2) Check casher. (3) Issuer of traveler’s checks, money orders or stored value. (4) Seller or redeemer of traveler’s checks, money orders or stored value. (5) Money transmitter. (6) U.S. Postal Service. “
FinCEN
In this scenarios, you do not only require registration with FinCEN but also money transmitter licenses for each of the states that your business will be operating in. As a startup, it might be difficult for you to get licensed in every state since the cost and time required is quite high, however, you could start with a few states and gradually move on from there.
Read this guide for more details about money transmitter licenses in the US:
