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Simple English definitions for legal terms
money service business
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A quick definition of money service business:
Money Service Business: A type of business that helps people make payments or get cash in exchange for payment instruments. These businesses do not take deposits or give loans. Examples include companies that transfer money, sell payment instruments, provide stored-value cards, cash checks, or exchange currency. They are also called nonbank financial institutions or nondepository providers of financial services.
A more thorough explanation:
A money service business is a type of financial company that helps people make payments or exchange currency. Unlike banks, they do not accept deposits or give out loans. Examples of money service businesses include:
- Money transmitters: Companies that help people send money to others, often across borders.
- Payment instrument sellers: Businesses that sell prepaid cards or other payment methods.
- Stored-value providers: Companies that offer digital wallets or other ways to store money electronically.
- Check cashers: Services that cash checks for a fee.
- Currency exchangers: Businesses that exchange one type of currency for another.
For example, if someone wants to send money to a family member in another country, they might use a money transmitter. The money transmitter would take the money from the sender and give it to the recipient, often in a different currency. The sender would pay a fee for this service.
Another example is a check casher. If someone receives a check but does not have a bank account, they can go to a check casher to get the money. The check casher would take a fee for this service.