Money services businesses play an important role in providing financial services to people who do not have bank accounts in the United States. MSBs are able to provide money orders, traveler’s checks, check cashing, currency exchange and domestic wire money transfers. Federal law requires that MSBs must also comply with state laws. Each state has certain licensing requirements and registration, documentation and record-keeping procedures. In addition, there are bonding requirements and restrictions on what to do with the funds before disbursement.
Incorporate your business. Contact your secretary of state's office and download the necessary forms to incorporate your business. Obtain an employment identification number (EIN) from the Internal Revenue Service so you can open a bank account.
Download Form 107 from the Financial Crimes Enforcement Network's website, fincen.gov, and register your company as an MSB. The network is part of the U.S. Treasury Department.
Hire a compliance officer. This person will have ongoing responsibility for keeping your MSB compliant with all federal and state regulations. He should have the authority to oversee all new accounts, train the staff to know what to look for in money-laundering activities and keep the operations procedures current.
Develop an operations manual. Your MSB needs to have written policies and procedures to perform daily activities. The manual should be based upon a written assessment of risks to the MSB and should be customized to the business. The manual should consist of procedures for documenting transaction activities, gathering customer identification, maintaining records, foreign currency reporting and suspicious activity reporting, as well as procedures for ongoing training.
Start advertising. Billboards, newspaper ads and the Internet are excellent places to advertise your money transfer business. Develop a website that is user-friendly and has a strong security system built into it. This will prevent unauthorized users from hacking into your customer database.
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