Regulatory Alerts2003-11-19
Added
Definition of Money Transmitter (Merchant Payment Processor)
FinCEN determined that a merchant payment processor providing third-party origination services for Automated Clearing House transactions is not a Money Services Business under 31 CFR 103.11(uu). The ruling states that because the entity acts on behalf of merchants to submit payment instructions and remit funds rather than on behalf of customers, its role resembles payment processing rather than money transmission. Consequently, such entities are not required to register with FinCEN as money transmitters provided their role is limited to these specific functions.