To obtain a money transmitter license, every state requires a surety bond. Depending on your state, this license may be called money remitter, money services business, check casher, or sales of check license.
Why Do I Need This Bond?
A surety bond is made to protect the public. In basic terms, it guarantees your business will adhere to all laws and requirements in your industry. In the event your business conducts unlawful acts, a consumer of your services may file a claim on the bond.
Nearly any company that offers payment services requires a money transmitter bond. Due to a history of fraudulence and inaccurate money transmissions, state agencies now require this bond to protect consumers. While this bond does not protect the business owner, it offers proof that your business handles clients’ money responsibly.
How Much Will the Bond Cost?
The cost of the bond, the “premium,” depends largely on the bond amount and the applicant’s financial status. The state requiring the bond determines the amount. At Surety 1, we will find you the lowest quote for your bond, starting at only 1.5% of the bond amount.
Money Transmitter Bond
In order to get your money transmitter’s business license, you’ll need a bond.
- Required by: Minnesota Department of Commerce
- Minimum bond amount: $25,000
- Maximum bond amount: $250,000
- Valid: 1 year- renewals due December 1st of each year
The bond amount is determined by the obligee based on the number of business locations.
- 3 or less = $25,000 bond amount
- More than 3, but less than 7 = $50,000 bond amount
- More than 6 = $250,000 bond amount
The applicant should verify the bond amount with the obligee before applying for the bond to ensure the bond amount is correct.
Effective 1/1/2024 Surety bond: greater of $100,000 or
100% average recent quarter daily
money transmission liability in
Minnesota up to $500,000
Money Transmitter License
These are additional details about the licensing process that you should be aware of. (Only the bond is handled at Surety1, but this information will help you get your license.)
Every applicant must be in good financial standing in order to achieve a license which includes a specific net worth.
The net worth depends on how many business locations there are:
- 3 or less = $25,000 net worth
- More than 3, but less than 7 = $50,000 net worth
- More than 7 = $500,000 net worth
All licensing fees are required by the obligee, not the surety company
Money transmitters in Minnesota must also register as a money services business (MSB) with the Federal Crimes Enforcement Network (FinCEN). The registration process must be completed by the Bank Secretary Act (BSA) e-filing system.
The license application can be filled out using an electronic system referred to as NMLS. Although, for businesses that are not conducting multi-state businesses or do not want to use the electronic application system can also have access to other application forms.
Visit a checklist for new money transmitter license applications at NMLS.