Does the size or scale of a business impact whether it is considered a money transmitter?
Money Transmitter License
Asked by Question Bot06/Oct/20141 answer
1 Answer
F
Faisal Khan
Answered 06/Oct/2014
Answering with respect to the points listed in your Question details:
(1). Grey area, but yes, you're leaning towards a money transmitter. Provided you do more of these transactions as a business and exceed a specific aggregate US Dollar value (say US$ 10,000 per month), then you're pretty much a money transmitter, as this would be escrow service and a marketplace combined. For which money transmitter license is required. Why? Because you're touching the money!
(2) See answer above. Yes.
(3). Yes, and if you are involving Credit/Debit cards to process payments, you are now also an aggregator (i.e. a Payments Facilitator) and would need to register as such in all territories from where you are picking up merchants (read: sellers).
(4). AirBnB is sourcing clients from across state lines and hence would need to be a money transmitter (which they are). A small business can probably get away with, because the regulators are extremely busy, and may/may-not go after you. You'd probably be fined or get a cease & desist notice.
When you're talking large amount of Dollar volume, the regulator does wake up!
A real-estate agent is licensed for their work, except the money moved does not touch them (i.e. the realtor) it is a transaction between the buyer and the seller directly, or between their financial institutions. The realtor gets a cut due to the listing contract they have with the seller.
------------------
Original Answer:
No they are not, unless they are somehow engaged in money transmission activities.
(1). Grey area, but yes, you're leaning towards a money transmitter. Provided you do more of these transactions as a business and exceed a specific aggregate US Dollar value (say US$ 10,000 per month), then you're pretty much a money transmitter, as this would be escrow service and a marketplace combined. For which money transmitter license is required. Why? Because you're touching the money!
(2) See answer above. Yes.
(3). Yes, and if you are involving Credit/Debit cards to process payments, you are now also an aggregator (i.e. a Payments Facilitator) and would need to register as such in all territories from where you are picking up merchants (read: sellers).
(4). AirBnB is sourcing clients from across state lines and hence would need to be a money transmitter (which they are). A small business can probably get away with, because the regulators are extremely busy, and may/may-not go after you. You'd probably be fined or get a cease & desist notice.
When you're talking large amount of Dollar volume, the regulator does wake up!
A real-estate agent is licensed for their work, except the money moved does not touch them (i.e. the realtor) it is a transaction between the buyer and the seller directly, or between their financial institutions. The realtor gets a cut due to the listing contract they have with the seller.
------------------
Original Answer:
No they are not, unless they are somehow engaged in money transmission activities.