MSBMoney Services Business
A money services business (MSB) is a non-bank business that transmits money, cashes checks, exchanges currency, issues or sells money orders and traveler's checks, or provides or sells prepaid access. MSBs range from small check cashers to large money transmitters, and in the US they are subject to Bank Secrecy Act requirements administered by FinCEN. While MSBs focus on moving money and providing cash services, payment service providers (PSPs) focus on processing electronic payments for businesses.
Why it matters
MSBs handle high volumes of cash and cross-border transfers, often for walk-in customers with no ongoing account relationship, which makes them an attractive channel for placing and layering illicit funds. Under US rules, most MSBs must register with FinCEN and renew every two years, maintain a written AML program, file suspicious activity and currency transaction reports, and keep records of funds transfers. Most states also require money transmitters to hold a state license.
FinCEN's definition turns on activity, not labels. Currency dealers, check cashers and sellers of money orders are covered when they exceed $1,000 per person per day, while money transmitters are covered at any amount. FinCEN guidance treats many businesses that exchange or transmit convertible virtual currency as money transmitters, bringing crypto exchanges and kiosk operators into scope.
Banks that serve MSBs are expected to assess the risk of each relationship and monitor the activity flowing through its accounts, not to act as the MSB's regulator.
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