Information on Money Transmitter License Bonds
SuretyBonds.com can issue money transmitter bonds nationwide. If you need a surety bond for a money transmitter license, request a free quote now!
To ensure that money transmitters adhere to industry laws and other standards, most states require them to post a surety bond before they can be legally licensed. Every state other than Montana and South Carolina requires money transmitter bonds. In some states, these bonds are known as money remitter bonds, money services business bonds or check casher bonds. Don’t worry if you are unsure about money transmitter bonds and how they work. The surety experts at SuretyBonds.com developed this quick and easy guide just for you.
As with other surety bond types, money transmitter or remitter bonds guarantee that a business is licensed appropriately and adheres to industry regulations. Each bond brings three entities together in a contract:
- The state is the obligee that requires the bond.
- The money transmitter business is the principal that purchases the bond.
- The insurance underwriter is the surety that issues the bond.
In the case of transmitter bonds, the principal is usually a company that provides payment services or sends money from one location to another via the U.S. Federal Reserve banking system, also known as Fedwire. Some examples of recognizable money transmission services include Western Union and JP Morgan Chase.
Greater industry regulation and stricter licensing requirements have been put into place in the past decade as a result of digital commerce and online payments. If you are an online retailer and accept credit card payments through your website or have a mobile application that allows peer-to-peer money transfers, you are most likely required to post a surety bond. Examples of this newer generation of money transmission businesses include Paypal and Amazon.
The money transmission industry over time, as a whole not limited to more recent years, has become more tightly regulated due to increases in fraudulent and unethical behavior relating to money transfers. A number of groups were established to help offset this activity and increase security of funds transferring. For example, the National Money Transmitters Association (NMTA) was formed in 1999 as a unified group that would address issues and help “improve the maligned image of money transmitters.” The Money Transmitter Regulation Association (MTRA) was also formed in 1989 to aid the “efficient and effective regulation of the money transmission industry.”
Transmitter bonds are now a necessary expense for wire transfer companies. However, along with that cost comes the assurance that money is transmitted accurately and confidently.
How Much Does a Transmitter Bond Cost?
Your exact premium will be based on how much coverage you need, which varies by state. For example, Connecticut requires $300,000 of minimum coverage, Illinois requires $100,000, and New Jersey requires $25,000. Your precise bond amount can be determined by several factors, including current net worth and financial condition, percentage of money transmission sales and other relevant criteria. In most cases, applicants with credit scores of 700 or greater will generate the best rates for this type of surety bond. These applicants should expect to pay a premium that’s 1-5% of the bond amount, which means $25,000 of coverage would cost just $250 to $1,250/year. The best way to determine what you’ll pay is to get a free, no-obligation surety bond quote today.
|Bond Type||Bond Amount||Cost by Credit Score*|
|680 and up||679 - 600||599 or lower|
|Money Transmitter Bond||Varies by State||Starts at 1.5%||3-9%||10%+||Apply Now|
Specific Costs by State
Bond costs and requirements vary greatly by state as the bond amounts and regulations surrounding each license are established on a state level. Select your state below for more information about Money Transmitter Bonds in your area or call 1 (800) 308-4358 to speak with a surety expert.
Or, choose your state from the list below:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- Washington D.C.
- West Virginia
What are the Money Transmitter Licensing Requirements?
Just as the surety bond amount varies by state, the licensing requirements for money transmitters vary by state. Common components for approved money transmitter licenses include the following:
- applicant’s name and business address
- identifying information (taxpayer identification number, social security number, etc.)
- fees (initial application fee, annual renewal fee, criminal background fee)
- minimum net worth
- successful criminal background check
- maintenance of permissible investments
- surety bond
For a comprehensive list of licensing requirements specific for each state, check out this helpful resource. If you have any questions about money transmitter surety bonds or are ready to receive a quote for one, give us a call at 1 (800) 308-4358 or fill out a bond request online.
Don’t Let Bad Credit Stop You
With our unique bad credit bond program, SuretyBonds.com can help 99% of applicants get bonded no matter their credit score. Our surety experts work with underwriters who specialize in writing bonds for applicants with credit issues. We even offer special premium financing that allows qualified applicants to break up their premium into smaller, more manageable payments. Don’t let poor financial credentials keep you from getting the bond you need.
Receive Your Transmitter Bond Quickly
Our account managers know the bonding process backward and forward, and they’ll walk you through every step. After taking your application, your account manager will shop your bond to find you the best rate available. Your bond will be issued as soon as payment is received. A copy of your bond will arrive immediately via email, and your original bond form will be mailed according to your shipping preferences. If you need your bond in a hurry, choose our overnight shipping option. What are you waiting for? Get started now!