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What is a money transfer license?

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A money transfer license, or money transmitter license (MTL), is a legal authorization that allows a company or entity to move funds. This license can be a major advantage for service providers involved in payroll and payroll payments and payments operations.

There are different types of money transfer licenses. To avoid compliance mishaps, companies must ensure the third-party provider they use has the appropriate money transfer license for the services they provide.

In global payroll and payments, a money transfer license becomes especially valuable, as it allows for the cross-border movement of funds without concerns for compliance breaches.

Who is eligible for a money transfer license?

Companies that are involved in payments, payroll, or other financial services are generally eligible for a money transfer license. The exact criteria, however, will vary depending on the type of license.

To obtain a money transfer license, a company has to go through a complex application process proving its adherence to all regulatory requirements, its financial stability, and demonstrating it can carry out the operations and procedures necessary for proper risk management and money transfer trustability.

What are the different types of money transfer licenses?

There are different types of money license, each with their own criteria and requirements. Here are some examples:

  • Money Service Business (MSB) License: This license can be used for a broad range of services like currency exchange and a variety of payment types.
  • Payment Institution License: In this case, the license is more payments-focused, including electronic payments and issuing payment instruments like prepaid cards.
  • Domestic Money Transfer License: With this license, organizations can transfer funds within one specific country.
  • International Money Transfer License: This license allows organizations to facilitate cross-border payments between different countries and different currencies.
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