Money Transmitter License and MSB Compliance Attorneys
Federal and state money transmission analysis, FinCEN registration, and licensing counsel for payment businesses anywhere in the United States.
If your business accepts money from one person and sends it to another, federal and state regulators may treat you as a money transmitter. Under the federal Bank Secrecy Act regulations, money transmission services means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of that value to another location or person by any means. Whether a particular business is a money transmitter is a matter of facts and circumstances, and the same words in a state statute can lead to a different answer.
Industria Business Lawyers advises payment collectors, marketplaces, payout and remittance intermediaries, fintech platforms, and digital asset businesses on whether they fall inside the definition, whether an exemption applies, and what registration or licensing follows. Most engagements begin with an initial memo covering federal MSB and FinCEN analysis and a state level money transmitter license assessment for the states where your customers are. From there we provide go forward guidance on which states require licensing, which do not, and where a payment partner arrangement may be the better path.
Every business is different, and not every structure needs a license. The analysis is what tells you which side of the line you are on before a regulator does.
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Find Out Whether Your Business Needs a License
Money Transmission Questions We Handle
The federal definition is broad, but it comes with exclusions, and the states write their own versions. These are the questions clients bring to us most often.
Are You a Money Transmitter Under Federal Law?
The federal rule, 31 CFR 1010.100(ff)(5), covers a person that provides money transmission services and any other person engaged in the transfer of funds. Transmission by any means counts, including through a financial institution, an electronic funds transfer network, or an informal value transfer system. We map your flow of funds against that definition and document where you land.
Do You Qualify for a Federal Exclusion?
The same rule excludes a person that only acts as a payment processor to facilitate the purchase of, or payment of a bill for, a good or service through a clearance and settlement system by agreement with the creditor or seller, and a person that accepts and transmits funds only integral to the sale of goods or the provision of services by that person. The exclusions are narrow and fact dependent. We test each one against your agreements and your actual practice.
State Money Transmitter Licensing
A federal answer does not settle the state question. Florida, for example, provides that unless exempted, a person may not engage in, or in any manner advertise that they engage in, the activity of a money transmitter for compensation without a license. Texas provides that a person may not engage in the business of money transmission, or advertise, solicit, or hold itself out as engaging in it, unless licensed. New York requires a license from the superintendent to engage in the business of receiving money for transmission. Massachusetts, under a money transmission chapter that replaced its former law on 1 January 2026, provides that a person shall not engage in the business of money transmission, or advertise, solicit or hold itself out as providing it, unless licensed. The District of Columbia prohibits engaging in the business of money transmission without a license from the Commissioner. We assess each state where your customers are and advise on the application process where a license is required.
Agent of Payee and Other State Exemptions
Several states exempt a person appointed as an agent of a payee to collect and process payments for goods or services, on conditions such as a written agreement with the payee and treatment of payment to the agent as payment to the payee. Other states have no such exemption. We identify which exemptions your structure can rely on, what documentation each one demands, and where reliance is not available. Our agent of payee exemption page sets out the conditions state by state.
FinCEN MSB Registration
With limited exceptions, each money services business must register with FinCEN whether or not it is licensed by any state. The registration form must be filed within 180 days after the business is established and renewed every two calendar years. We prepare and file the registration, maintain the agent list the rule requires, and calendar the renewal. Our FinCEN MSB registration page covers the filing in detail.
Anti Money Laundering Program and Ongoing Compliance
Each money services business must develop, implement, and maintain a written anti money laundering program commensurate with its risks, with policies, procedures, and internal controls. We draft the program, the provider agreements, the terms of service, and the flow of funds documentation that a regulator or a banking partner will ask to see.
Federal Rules, State Rules, and How They Fit Together
Two separate systems apply at the same time, and satisfying one does not satisfy the other.
Federal. FinCEN administers the Bank Secrecy Act rules for money services businesses. Registration is a filing, not a license. It applies to every money services business, whether or not licensed as a money services business by any state, with limited exceptions such as a person that is a money services business solely because it serves as an agent of another money services business. Registration comes with the anti money laundering program, recordkeeping, and reporting obligations that follow.
State. Each state decides for itself who needs a money transmitter license, what exemptions exist, and what an application requires. Florida defines a money transmitter as an entity that receives currency, monetary value, a payment instrument, or virtual currency for the purpose of acting as an intermediary to transmit it to another location or person. Texas applies its license requirement to a person who receives or expects to receive compensation, directly or indirectly, for conducting money transmission. Massachusetts defines money transmission as selling or issuing payment instruments or stored value to a person located in the commonwealth, or receiving money for transmission from a person located there, and limits the term to transactions engaged in for personal, family or household purposes. The District of Columbia defines it as the sale or issuance of payment instruments or engaging in the business of receiving money for transmission or transmitting money within the United States or to locations abroad. New York’s license requirement carves out an agent of a payee, and other states exempt a transaction in which the recipient of the money is an agent of the payee under a preexisting written contract where delivery to the agent satisfies the payor’s obligation.
What that means for a growing business. A payment collector with customers in several states can be exempt in one state, licensable in a second, and outside the definition in a third. The memo we prepare answers each state separately and sets out the options: document the exemption, apply for a license, register with FinCEN, or restructure the flow of funds through a licensed payment partner.
What Our Clients Say About Us
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I would recommend working with Aaron and team.”
Julien Genestoux from Unlock, Inc
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They consistently deliver thorough and timely work. For any small business looking for dependable and knowledgeable corporate counsel, we wholeheartedly recommend IBL.”
Felipe Pinto from Revolve Labs
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As a result, we’ve continued to rely on them as our go-to legal counsel for ongoing corporate matters.”
Zachary Panos from Fourcaster LLC
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The attorneys were incredibly responsive, guiding me through every step of the process with clarity and professionalism. They took the time to address all my questions and concerns, ensuring that I felt confident in each decision we made. Their attention to detail and thoroughness were evident in the documents they prepared, which gave me peace of mind knowing that everything was handled properly. What stood out most was their commitment to my vision. They not only provided legal advice but also offered valuable insights into the industry, helping me navigate potential challenges and seize opportunities. Their strategic approach was instrumental in setting up a robust fund structure that aligns with my goals. Overall, working with IBL was a fantastic experience. They made a complex process manageable and stress-free. Thank you for your outstanding support.””
Jeff from Solar Carbon Credit Fund
Tell Us About Your Matter
How We Work a Money Transmission Matter
Intake Questions +
Where your customers are located, approximate monthly transaction count and dollar volume, how long funds sit in your account before they go out, whether you have any discretion over where the funds go, and whether your provider agreements, terms of service, and website language are already drafted.
Flow of Funds Review +
We trace each payment from the payor to the final recipient, including every account it touches and every party that can direct it. Diagrams help. This is the record the federal and state analysis is built on.
Federal Analysis +
We apply the federal definition and each exclusion to your structure and document the conclusion, including whether FinCEN registration and an anti money laundering program are required.
State by State Assessment +
For each state where your customers are, we read the current statute and exemptions and advise whether a license is required, whether an exemption is available and on what conditions, or whether the activity falls outside the state’s definition.
Written Memo +
The initial engagement produces a memo covering the federal MSB and FinCEN analysis and the state level license assessment, written so that you, your banking partner, and any future acquirer can rely on it.
Path Forward +
Depending on the memo, the next step may be exemption documentation, a state license application, a FinCEN registration, or a payment partner arrangement where that is the better path. Go forward guidance is available as your business adds states or changes its model.
Ongoing Compliance +
Registration renewals, program updates, agreement revisions, and responses to regulator or bank partner inquiries as your volume grows.
FAQ
01 • Payments Do I need a money transmitter license to collect payments for someone else?
It depends on the state and on the structure. Some states exempt an agent of a payee who collects payments for goods or services under a written agreement where payment to the agent counts as payment to the payee. Other states list no such exemption. The federal rule separately excludes certain payment processors and funds transfers integral to a sale of goods or services. The answer requires reading each state’s statute against your agreements and flow of funds.
02 • Payments Is FinCEN registration the same as a state license?
No. FinCEN registration is a federal filing required of each money services business whether or not it is licensed by any state. A state money transmitter license is a separate authorization issued by that state’s regulator. Many businesses need both.
03 • Payments What is the agent of payee exemption?
A state law exemption for a person appointed by a payee to collect and process payments from payors for the payee’s goods or services. Texas, for example, requires a written agreement between the payee and the agent, that the payee hold the agent out to the public as accepting payments on its behalf, and that payment to the agent extinguish the payor’s obligation with no risk of loss to the payor if the agent fails to remit. Conditions differ by state.
04 • Payments How long does a new money services business have to register with FinCEN?
Under 31 CFR 1022.380, the initial registration form must be filed on or before the end of the 180 day period beginning the day after the business is established, and the registration must be renewed for each two calendar year period after the initial period.
05 • Payments What happens if a business operates without a required license?
State statutes prohibit engaging in, and in several states advertising or holding oneself out as engaging in, money transmission without a license, and FinCEN states that civil and criminal penalties may be imposed for violating the registration requirement. Banking partners and payment processors also ask about licensing status. The practical answer is to get the analysis done before the question is asked.
Talk to a Money Transmitter Compliance Attorney
Payment businesses anywhere in the United States. Call (202) 860-1210 or describe your flow of funds through the form. Every business is different, and not every structure needs a license. We will tell you which questions apply to yours and how we would approach them.
This page provides general information about federal and state money transmission regulation and does not constitute legal advice. Reading it does not create an attorney client relationship. Statutes and regulations cited were reviewed on the date this page was last updated and are subject to change. Whether a particular business requires registration or licensing depends on its specific facts.