As I don’t deal in the license, license applications, and related legal opinions directly, you may connect with my colleagues, as listed below. You can provide them with my name as a reference. These are folks whom I recommend but have no commercial dealings or affiliation with. For US Licensing/Payments Law:Eric I. GoldbergPartner, Consumer Financial […]
What regulations would a peer to peer money transfer platform face (TransferWise model but without an intermediary)? The platform does not touch money. It allows peers to find matching, opposing transactions and conduct the money exchange themselves.
If a State or Federal regulator cannot find an exact way to pin this marketplace down, then they go after intent. Barring the problem the marketplace will face with respect to trust, etc. let us look at the intent. The intent will clearly how that without the market place, the transaction cannot take place. How […]
If I receive money on behalf of another person to make a purchase online for them, am I a money transmitter? I am in the US receiving dollars to make purchase online on behalf of a person living outside of the US.
This comes under the Agent of Payee exemption and as such, IIRC only 12 or 13 US States recognize this exemption. Other States don’t provide an exemption, so you need a money transmitter licenses for those states.
Do I need a money transmitter license if I receive money on behalf of a person in another country (e.g., Ghana)? I make a pay out to this person in Ghana at the end of every month. This arrangement prevents excessive microtransaction fees.
This makes you an intermediary, when you cited on behalf of a person, implies you are neither the owner of the transaction, nor the recipient and hence this makes you an intermediary, and where ever you go, in most countries this would classify you as a money transfer business and thus require you to get licensed.
Are you considered a money transmitter if your end users sends you their private keys to send funds on their behalf?
It depends. Typically as a money transmitter, you are neither the owner of the transaction nor the beneficiary. You are acting as an intermediary. Whether the funds are pushed to you, or the funds are pulled by you, via authorization, the fact remains the same, you are acting as an intermediary to execute the transaction. […]
Are payroll service providers considered to be money transmitters/money service businesses? And if not, why?
Originally, payroll companies did not need to be licensed. That is how the bulk of them operated. 100s of companies processed funds on behalf of their customers and no money transmitter licenses were required of them. However, if we look at the flow of funds, if funds are processed through them, then yes, they are […]
Would it be legal in the US for a business to effectively create their own currency in which all of their products must be bought? Anyone who wanted to buy anything would exchange the USD to the store currency. There would be no exchange fee.
Yes. This would be legal, but then again, IANAL (I am not a lawyer). If you replace the word ‘currency’ here with the word ‘store-credits’ or ‘loyalty-points’ the whole scenario doesn’t look so bad after all. The condition here would be that the issuer of this currency, i.e. you, can issue the currency (as much […]
Will an app that allows people send money internationally be disruptive? This app allows users become their own money transmitters by personally exchanging currencies with other money senders, eliminating the need for money transmitters.
There are various ways of looking at it, rather than just the money transmission angle. State regulators or federal regulators will look at the intent of your app. Some pertinent questions are: Does your app facilitate the transactions? Yes! Can the marketplace charge a fees for such a facilitation? Yes! Does the app aid in the transfer of money […]
If you are an overseas Pakistani with no income source in Pakistan and have been away from Pakistan for more than 183 days in a tax-calendar year, you are not required to submit tax returns in Pakistan.
Does money transmitter A need to notify state regulators of his or her agreement with another money transmitter B? Are MTOs free to enter and exit agreements as they wish without any permission from regulators?
No notification is necessary. During a state audit, the auditor can ask you to show the correspondent tie-up agreement. Truth be told, all agreements, etc. for money transmission will be reviewed during a state audit. MTOs are free to enter and exit into any agreement they wish. No prior permission is required.