South Dakota Money Transmitter Bond Overview
- Purpose: To protect the public from fraudulent money services or transmission practices
- Who Needs It: All money transmitter licensees in South Dakota
- Regulating Body: The South Dakota Division of Banking
- Bond Amount: $100,000
- Minimum Price: $1,500 or 1.5%, 25% discount available for multi-year terms
What Is a South Dakota Money Transmitter Bond?
A South Dakota money transmitter bond is a financial guarantee to the state that the money transmitter will comply with all applicable laws and regulations. It protects customers from fraud and monetary loss.
Who Needs a Money Transmitter Bond?
Filing a surety bond is a prerequisite to apply for a South Dakota money transmission license. If you perform any of the following activities, you’ll need a money transmitter license and bond to operate in the state:
- Selling or issuing traveler’s checks, drafts, and/or money orders
- Bill paying services
- Payroll processing services
- Selling or issuing prepaid access/stored value
- Currency exchanging services
- Electronic money transmitting
- Other money services
Note: We do not currently have any surety markets that issue bonds for virtual currency exchange services like bitcoin ATMs.
Bond Coverage Requirements for South Dakota Money Transmitters
All money transmission licensees in South Dakota need a surety bond for either:
- $100,000 coverage; or
- the sum of 100% of the average daily money transmission liability in South Dakota for the most recent quarter.
The bond amount is capped at $500,000.
If your tangible net worth is greater than 10% of your total assets, you can maintain the $100,000 bond regardless of transmission liability.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a South Dakota Money Transmitter Bond Work?
This type of license surety bond is a financial guarantee that you, the principal, will uphold your professional obligation to the state.
| Bond Party | Description |
|---|---|
| 1. Principal | The money transmission business owner(s) |
| 2. Obligee | The South Dakota Division of Banking |
| 3. Surety | The issuing surety provider |
In this three-party contract, your obligation is backed by the surety provider who will pay out claims up to the bond amount if you harm consumers. However, unlike with insurance, you are responsible for repaying bond claims.
How Do I Get a Money Transmitter Bond in South Dakota?
We make the bonding process quick and easy. Just submit the quote request form on this page. A surety expert will get back to you within one business day or less to provide your quote or request additional information.
How Do I File My Bond?
This bond is electronically filed, so you’ll never receive a paper copy. After you purchase the bond, the surety will upload it to NMLS on your behalf.
To be officially bonded, you’ll need to log in to NMLS and authorize the surety to “accept” the bond form. Then, you can proceed with your license application or renewal.
How Do I Renew My Money Transmitter Bond?
You’ll need to renew your bond before the term expires to maintain coverage. The standard term length is one year, but we also offer some two- and three-year options.
To renew your money transmitter bond, pay the renewal invoice when prompted by your surety provider. When you work with SuretyBonds.com, we’ll start contacting you 90 days before the bond expires so you have plenty of time to renew.
How to Get a Money Transmitter License in South Dakota
The South Dakota Division of Banking oversees money transmitter licensing, which is done online through the NMLS. You’ll need to provide several materials, including, but not limited to, the following:
- Completed MU1 and MU2 forms with all applicable documents attached in the Document Uploads section
- Resume outlining relevant experience
- List of permissible investments
- Organizational and management charts
- Company formation documents
- Flow of funds structure documentation
- Sample documents
- Company staffing and internal policies
- Certificate of authority or good standing
- Detailed business plan
- Audited financial statement that meets minimum net worth requirements
- $1,000 license registration fee
Make sure you complete every item on the NMLS checklist, otherwise your application will be rejected if not corrected within 14 days of submission.
You can email the Division of Banking at [email protected] for license-specific questions.
