A money service business (MSB) is a firm that transmits money, exchanges currency, or cashes checks. Because these services move money quickly and often in cash, criminals target them, so MSBs must follow anti-money laundering rules and register with regulators.
Key takeaways
- A money service business transmits money, exchanges currency, or cashes checks.
- MSB is the term used in US regulation for these firms.
- They include money transmitters, currency exchanges, and check cashers.
- MSBs must register with FinCEN and follow full AML rules.
- Criminals target MSBs because they move money fast, often in cash.
- Many MSBs face de-risking, losing bank accounts over perceived risk.
On this page
What it isTypes of MSBWhy they are regulatedAML dutiesRegistrationThe de-risking problemMSB vs bankStaying compliantFAQsRead more
1970
Year the US Bank Secrecy Act, which covers MSBs, was enacted
Source: US Bank Secrecy Act
~20%
Fall in correspondent banking links from 2011 to 2019, hitting MSBs
Source: Financial Stability Board
$800B to $2T
Laundered worldwide each year, some through money services
Source: UNODC
What is a money service business?
A money service business is a company that provides money services rather than traditional banking. It moves money, changes one currency for another, or turns a check into cash, without being a bank.
The term comes from US regulation, where MSBs are a defined category with their own rules. Many people use these firms every day to send money abroad or exchange currency for travel.
Because they handle other people’s money, MSBs carry real AML duties. Read more: those duties flow from the Bank Secrecy Act.
Types of money service business
MSB is a broad label covering several kinds of firm. They share the trait of moving or converting money.
- Money transmitters. Firms that send money from one person or place to another, including remittance companies.
- Currency exchanges. Bureaux de change that swap one currency for another.
- Check cashers. Businesses that turn checks into cash for a fee.
- Money order and traveler’s check issuers. Firms that sell these instruments.
- Some crypto firms. In many places, exchanges that convert crypto to cash count as MSBs.
A single firm can fall into more than one type. A corner shop that both cashes checks and sells money orders is an MSB on both counts.
Why money service businesses are regulated
MSBs are regulated because their services are attractive to criminals. The very features that make them useful, speed and cash, also make them a target for laundering.
A money transmitter can move funds across borders in minutes. A currency exchange can turn one pile of cash into another. Without controls, these services would be an easy way to move and clean dirty money, which is why the rules pull them in.
The aim is to keep money services open and useful while closing the door to abuse.
There is a public interest here too. Money transmitters carry billions in remittances that families depend on, so regulators try to control the risk without shutting down services that people genuinely need.
Screen a customer before you send
Run one search across sanctions, PEP, and adverse media data to check a customer or beneficiary before moving money.
The AML duties of an MSB
An MSB carries the same core AML duties as other regulated firms. The obligations are set out clearly in law.
- Register. Sign up with the relevant regulator, such as FinCEN in the US.
- Run customer checks. Verify customers through customer due diligence.
- Keep records. Retain evidence of transactions and checks.
- Report. File reports on suspicious activity and large cash transactions.
- Have a program. Run a written AML program with a compliance officer and training.
Do this: get an indicative read on your exposure with the AML Risk Assessment.
Registration and oversight
Most countries require MSBs to register or be licensed before they operate. Registration puts them on the regulator’s radar.
In the US, an MSB must register with FinCEN and often hold state licenses as well. Registration is not a one-time formality; it comes with ongoing duties to report, keep records, and stay compliant. Operating an unregistered money transmitting business is itself a crime in the US.
Registration also makes an MSB visible to law enforcement, which is part of the point. A registered firm can be supervised and held to account, while an unregistered one operating in the shadows is exactly what the rules are designed to surface.
The de-risking problem
MSBs face a problem that other firms often do not: losing their bank accounts. Banks sometimes decide the whole sector is too risky and cut ties, a practice called de-risking.
When a bank closes an MSB’s account, the MSB may struggle to operate at all, since it needs banking to function. This has hit remittance firms especially hard, sometimes cutting off affordable ways for people to send money home. Regulators have warned that blanket de-risking can do more harm than good.
Money service business vs bank
An MSB and a bank both handle money, but they are not the same. The difference lies in what they are allowed to do.
| Money service business | Bank | |
|---|---|---|
| Core service | Transmitting or exchanging money | Full banking, including deposits and loans |
| Holds deposits | No | Yes |
| AML duties | Full AML rules | Full AML rules |
| Oversight | Registration and licensing | Full banking regulation |
Both must follow AML rules, but a bank does far more and is regulated more heavily. An MSB is focused on the movement and exchange of money.
How MSBs stay compliant
An MSB stays compliant by running the same disciplines as any regulated firm, scaled to its business. A few steps matter most.
- Register and stay registered. Keep filings and licenses current.
- Know your customers. Verify identity and watch for unusual patterns.
- Screen and monitor. Check names against watchlists and monitor transactions.
- Report promptly. File suspicious activity and cash reports on time.
Get an indicative AML risk rating
See where your money laundering risk is concentrated across customers, corridors, and channels.
Check a corridor’s country risk
Look up a country against FATF, sanctions, and corruption data to weigh a remittance corridor.
Frequently asked questions
What is a money service business?
A money service business, or MSB, is a firm that transmits money, exchanges currency, or cashes checks without being a bank. The term comes from US regulation. Because these services move money quickly and often in cash, criminals target them, so MSBs must follow anti-money laundering rules and register with regulators.
What businesses count as MSBs?
MSBs include money transmitters and remittance firms, currency exchanges or bureaux de change, check cashers, issuers of money orders and traveler’s checks, and, in many places, crypto exchanges that convert digital assets to cash. A single firm can fall into more than one category, such as a shop that both cashes checks and sells money orders.
Why are money service businesses regulated?
MSBs are regulated because their services are attractive to criminals. Speed and cash make them useful, but also make them a target for laundering. A transmitter can move funds across borders in minutes, and an exchange can turn one pile of cash into another. Rules pull them in to close the door to abuse while keeping the services useful.
Do MSBs have to register with FinCEN?
Yes. In the US, a money service business must register with FinCEN, the Financial Crimes Enforcement Network, and often hold state licenses as well. Registration comes with ongoing duties to report, keep records, and stay compliant. Operating an unregistered money transmitting business is itself a federal crime in the US.
What AML duties does an MSB have?
An MSB must register with the relevant regulator, run customer due diligence, keep records of transactions and checks, report suspicious activity and large cash transactions, and operate a written AML program with a compliance officer and staff training. These duties mirror those of other regulated firms, scaled to the size and risk of the business.
What is the difference between an MSB and a bank?
An MSB transmits or exchanges money but does not hold deposits or make loans, while a bank offers full banking services. Both must follow anti-money laundering rules, but a bank does far more and is regulated more heavily. An MSB is focused specifically on the movement and exchange of money rather than general banking.
Why do MSBs lose their bank accounts?
MSBs sometimes lose bank accounts because banks decide the whole sector is too risky and cut ties, a practice called de-risking. Losing banking access can make an MSB unable to operate, since it needs a bank to function. This has hit remittance firms hard, and regulators warn that blanket de-risking can do more harm than good.
What is de-risking for money service businesses?
De-risking is when a bank ends its relationship with an MSB, or the whole MSB sector, rather than manage the perceived risk. It avoids the cost of checking each firm, but pushes legitimate money flows into less visible channels. Regulators encourage banks to assess each MSB on its own controls instead of shunning the category.
Are cryptocurrency firms money service businesses?
In many jurisdictions, yes. Crypto exchanges that convert digital assets to and from cash are often treated as money service businesses and must follow the same anti-money laundering rules, including registration. The exact treatment varies by country, but the trend has been to bring crypto firms that handle money into the MSB framework.
How do MSBs stay compliant with AML rules?
An MSB stays compliant by keeping its registration and licenses current, verifying customers and watching for unusual patterns, screening names against watchlists and monitoring transactions, and reporting suspicious activity and cash transactions on time. It also needs a written AML program with a compliance officer and training, scaled to its size and risk.
What is a money transmitter?
A money transmitter is a type of MSB that sends money from one person or place to another, including remittance companies that let people send money abroad. Money transmitters are a common focus of AML rules because they move funds quickly and across borders, which criminals can exploit. They must register and follow full anti-money laundering duties.
Do MSBs need to report large cash transactions?
Yes. In the US, MSBs must report cash transactions above a set threshold, currently $10,000, through a currency transaction report, and must file suspicious activity reports when something looks wrong. These reporting duties are part of the Bank Secrecy Act framework and help authorities track the movement of large sums of cash.
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Last reviewed July 12, 2026 · 11 min read · Written for compliance and risk professionals · By the WhoWiki editorial team
Key takeaway: a money service business, or MSB, is a firm that transmits money or exchanges currency, and it must follow AML rules because criminals target these services.