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.
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.
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.
To ensure the money transmitter will comply with all laws stated by the Missouri Sale of Checks Law, a surety bond is required by the obligee.
In order to get your money transmitter’s business license, you’ll need a bond.
The applicant should verify the bond amount with the obligee before applying for the bond to ensure the bond amount is correct.
For renewals, the bond amount increases 5 times the greatest amount transmitted in one day during the previous year. This is required by the obligee, not the surety company.
The minimum bond amount for renewals is $100,000 and the maximum bond amount is $1,000,000. This is required by the obligee, not the surety company.
If the bond is cancelled for any reason, the Director of Finance of the State of Missouri must be contacted within 60 days of cancellation and provided the information that the bond is no longer valid. During the 60 days, the principle is still liable for any claims filed against the bond.
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.)
To apply for a license, the following is needed:
Licensing fees are required by the obligee, not the surety company.
Money transmitters in Missouri 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.
Go to the Missouri Division of Finance for more information.