How to Open a Money Transfer Business Online
Transferring money between parties without getting involved in the purchase transaction is refereed to as the money transfer business. One of the best known companies of this type is Western Union. With online transfers, you'll need to primarily rely on electronic funds transfers that are facilitated by an automatic clearing house.
- You'll first need to obtain a money transmitter license. The legalities of money transferring are regulated by each individual state. Each state will require a license for the transmission of money within state borders. You can find an online application on the appropriate departments website of each individual state.
- File a FinCEN Form 107 with the Financial Crimes Enforcement Network at the Treasury Department. The agency will classify money transmitters by providing money transmitting service as a money services business which is a non-bank financial institution under the Bank Secrecy Act. Every money services business needs to register with FinCEN within 180 days after the money service has been started.
- Start a transaction account with the bank. In order to fulfill the basic functions of a money transfer business, the transaction account will need to have two combined features that the bank only offers to merchant accounts. These accounts enable the money transfer business to not only send money to customers accounts but also to retrieve money from customers accounts.
- Create an online presence for your money transfer business. You'll need to find a website host that has business services to best meet the needs of your business. The company that you choose will need to have the ability to obtain all the necessary information in order to debit a customer's account in order to transfer the money to the customer.