Money Service Business Law and Legal Definition

Money service business is a non-bank entity providing mechanisms for people to make payments or to obtain currency or cash in exchange for payment instruments by any means through a financial agency or institution. The Bank Secrecy Act (BSA) requires certain money service businesses to register with the Financial Crimes Enforcement Network (FinCen).

Money service businesses are required to comply with the registration, reporting, recordkeeping, and anti-money laundering program requirements contained in the BSA. Money service businesses do not accept deposits or make loans. They include money transmitters, payment instrument sellers, stored-value providers, check cashers, issuer or seller of traveler’s checks or money orders and currency dealers or exchangers. To qualify as a money service business, a person should conduct more than $1,000 in business with a person in one or more transactions on any one day. Money service business is also termed as non-bank financial institution or non-depository provider of financial services.