What is more cost effective? Owning a License or Sponsoring one?
How much do money transmitter licenses cost (nationwide)? Take a guess. Now even if you multiple that number x10, you’re probably still not even close to the actual amount. We asked over a dozen specialists like lawyers, consultants, compliance specialists and industry brokers on how much (in their opinion) does a money transmitter license cost? The condensed results can be seen below.
Obtaining money transmitter licenses in the United States is no easy feat. So how much does a money transmitter license cost? Well, the costs vary from state to state, but all in all it takes in millions of dollars and is a process that can take up to two years.
Indicated below in the two tables are estimated costs of sponsorship versus applying/owning your own money transmitter licenses. Your mileage may vary according to the complexity of your project including transaction set, risk assessment and geography.
Licensing Expenses For Year 1
| EXPENSES (YEAR 1) | Apply | Sponsor |
|---|---|---|
| Surety Bonding @ $ 8,000,000 at 1.5% | $120,000 | $0 |
| Net Worth (over all) | $1,000,000 | $0 |
| Application Fees | $75,000 | $0 |
| License Fees | $30,000 | $0 |
| Compliance Officer | $120,000 | $0 |
| GAAP Audit | $15,000 | $0 |
| FISA Audit | $12,000 | $0 |
| Compliance Program | $75,000 | $0 |
| Compliance Audit #1 | $20,000 | $0 |
| Compliance Audit #2 | $20,000 | $0 |
| Transaction Management System Audit | $25,000 | $0 |
| Attorney Fees (application) | $125,000 | $0 |
| Legal Opinion Fees | $25,000 | $0 |
| Technology Audit #1 | $25,000 | $0 |
| Technology Audit #2 | $25,000 | $0 |
| One-time Cost | $0 | $15,000 |
| Annual Sponsorship Fees (paid monthly) | $0 | $45,000 |
| Miscellaneous Expenses | $25,000 | $0 |
| TOTAL | $1,737,000 | $60,000 |
Licensing Expenses for Year 2
As the licensing process takes nearly two years to complete, there are some recurring expenses you will have to incur in Year 2. So for purpose of a budget, you need to take the money transmitter license cost for both Year 1 and Year 2 into consideration.
See the estimated financials for Year 2 below.
| EXPENSES (YEAR 2) | Apply | Sponsor |
|---|---|---|
| Surety Bonding @ $ 8,000,000 at 1.5% | $120,000 | $0 |
| Compliance Officer | $120,000 | $0 |
| Renewal Fees for Licenses | $40,000 | $0 |
| Audits (Various, including Compliance) | $75,000 | $0 |
| Systems (Subscription Fees) | $25,000 | $0 |
| Annual Sponsorship Fees (paid monthly) | $0 | $45,000 |
| Travel & Miscellaneous Expenses | $20,000 | $0 |
| TOTAL | $400,000 | $45,000 |