Faisal Khan, LLC: Recent Episodes
Faisal Khan
Essentially, Yes. They are sending money to your Merchant's account, which is held under your umbrella but operated by the EMI. You cannot have access to funds that do not belong to you. I'm sorry, but you will have to learn yourself on how an omnibus account works under an FBO account or pooled account
Yes, but by qualification, let us be clear. You act as an ISO (Independent Sales Organization). The EMI has a limited payout network capability because of their bank and the payout partners. If their existing network covers the areas you want, then yes, certainly this is doable. However, if the EMI does not have the outreach to the type of payout partner that you are looking for, then the charges per MTO that are formally onboarded as a correspondent tie-up for payout.
In the United States and under the Remittance-as-a-Service (RaaS) solution, there is no grant of a sub-license. The license is never granted to you. You must understand this very clearly. Your program (i.e. your white-label) service is handled by the PLH (Principal License Holder). Meaning the white-label solution, from a regulatory, compliance, licensing, and custody of funds point of view is handled by the PLH. The PLH has no concern with your brand. That is for you to manage.
The Starter Package has 3 countries. A Correspondent Tie-Up Agreement cannot be done on the Starter package. It can only be done on Professional or Enterprise Package. If you upgrade, the difference in fee (including our referral fee) is due to us.
You can market this anywhere, where allowed by law. It is always a good idea (strongly suggested) to obtain an NOE (No Objection Email) from the PLH, notifying them about your intent to market the services in the very specific geographies, so that you may obtain approval on your marketing material so that you do not use any words or phrases or market a service that is either incorrect, partially true or not quite phrased correctly, etc. The solution (depending on the package you opt for), is the US to CountryX. Where Country X is denoted by the country/countries you provide to PLH for approval for payout, based on the number of countries allowed as per the RaaS package you have chosen.
If you are opting for an aggregate solution (Tri-Party Agreement) by using your say African Licensed entity to do payout with multiple countries in Africa and have only one-correspondent tie-up agreement with the PLH, then please kindly revisit what a correspondent tie-up is? and especially what is a trie-party correspondent tie-up? The two videos explain the concept of what correspondent tie-up agreements are - very well.
What is a Tri-Party Correspondent Tie-Up Agreement
What is a Correspondent Tie-up? & Why is it necessary?
Please note, should you wish to implement a tri-party correspondent tie-up agreement, in addition to the fees outlined in the RaaS section of our website, an additional Tri-Party Correspondent Tie-Up Agreement (one-time) fee is also applicable. See our pricing page for more details.
When you do an INTRA-Africa transaction, which is NOT originating from the US, then the PLH has no say in the matter. They are not a party to the transaction and their platform is NOT configured or aligned to do Intra-Africa transactions. So ideally, I would like to respond to this question as "Not Applicable".
However, if a transaction is originating from the United States to say Nigeria and the hub designate is Ghana (where the Tri-Party Correspondent Tie-Up Agreement has been signed with a licensed MTO), and the payout is being done to Nigeria then this is a perfectly legal transaction and the system (platform) simply sees this as a US-to-Nigeria transaction.
As cited above. The platform cannot be used independently of the original purpose for which it was created.
The E-Wallet is the ability to hold client funds indefinitely and not as a payment institution for STP. It does NOT come with any software. That is a separate subject matter altogether. The basic difference between STP and E-Wallet is the ability to custody funds indefinitely.
You can use it for the countries you are licensed for payout. You cannot use it for intra-Africa. You can only use it for the payout countries you have been approved for.
It requires underwriting and fraud is very high on credit cards. Our solution providers do not provide the underwriting. If you are a licensed Payment Facilitator, only then you can bring in your own underwritten credit card processing.
Ofcourse, it is your brand, your domain, your service/trademark, you can do whatever you want with it. The client (legally) will belong to the PLH due to licensing policy and how the US works (there is no passporting of clients). But the day you get your own license, you can reverify and KYC them on to your own platform, under your own license and compliance program.
You can charge whatever commission you want. That commission is YOURS, not your clients or the payers. Those funds belong to you. Your commission can be as low as zero (0), or 50% or 100%, you can charge whatever you want.
Please note, you would still need a mini-compliance. For template-based mini compliance, we charge €12,500 (one-time) for it. This would also include answering the AML Questionnaire as provided by the EMI for qualification.
Yes, we can. But this has an additional cost. Our introduction to a Money Transfer Operator and one that is acceptable to your business model and the EMI carries a referral fee tag of US$ 18,000 one-time per MTO introduced as a correspondent-tie-up. It takes between 1-3 months for an MTO to be onboarded by the EMI.
The operator-led model allows you to go live in a very short period of time, provided the EDD (enhanced due diligence is completed). The anticipated time to go live is between 3-6 weeks. It requires no regulator approval so that is a huge plus. The compliance burden, reporting, etc. are all done by the EMI themselves.
The funds are handled on your behalf by the EMI operator. Meaning if your merchant has an account with you, it would be an account held either under your pooled account or as a separate account, but under an FBO (For Benefit Of) arrangement of your merchant.
The money handling is done by the EMI or the account holder directly. You are not allowed to touch your merchant's funds.
Your funds are guaranteed by a safe-guarding account. You can read up on what a safeguarding account is. It is precisely meant for this, i.e. segregated so that the central bank/ regulator can release the funds to those who own them.
Not sponsorship. But you can apply for your own crypto license and we do offer that service. If you are interested in those details we can provide you with information.
The only restriction you have here is to deal in countries where crypto might not be allowed, for example, China. If you are sending crypto to a market that is deemed to have banned crypto or many transactions in dealing with crypto illegal, or where your flow of funds violates the norms of money transmission, needless to say, you would NOT be provided coverage. Otherwise, this is pretty legit and okay.
Under an RA model, your license outside doesn't count per se. You would need an EU-registered entity to be able to get a Registered Agent (RA) approval from an EMI. The registered entity (simply a company) can be anywhere in the EEA (European Economic Area).
Under an RA model or any other model you choose, this is a valid model. You're simply doing netting off and not sending funds across and using crypto for settlement. Perfectly allowed.
You would need an actual physical office in the country of license registration (this is assuming you are applying for a license). This cannot be a virtual office.
Sponsoring institutions typically charge:
- One-time Fee: € 15,000 (low),
- Monthly Recurring Fee: Low: € 3,000, Median: € 7,000, High: € 10,000
- Deposit: Most sponsoring institutions look at deposits (to cover expenses, etc.) starting at € 25,000.
We cannot. The services that are offered by them would be based on your discussion with the EMI directly. You must ascertain directly if the services that they provided are good and acceptable to you or not and if they match up with your transaction set, and Flow of Funds.
If you apply for a license then yes. For sponsorship (operator-led mode, no). For other types of delegate status such as EMD and RA, yes.
If it is a basic, operator-led model, then you do not need anything. If you are going for a regulatory approval-based relationship, i.e. EMD or RA, then you would need a law firm and a compliance program, etc. The sponsoring institution can recommend such names, we do not get involved and there are no additional costs from our side.
What sort of sponsorship are you seeking? Operator Led, EMD or RA? (See https://faisalkhan.com/delegate-status-comparison-table/)
This is for your paid-up capital and this for "applying' for a new license, and this is NOT for sponsorship. Are you interested in sponsorship (i.e. leasing a license) or do you want to apply for your own license?
For sponsorship? It depends, why you would need an accounting firm. Typically you would incorporate a new company within the European Economic Area (EEA) and you would need an accounting firm for your own company's activities. For purposes of sponsorship, you do not need an accounting firm in the license holder's country.
You have to pay monthly and other requisite fees. Your merchantability to bring customers would have no bearing on the monthly payment.
It depends on what you call robust. There are three available models
Using the PLH's own payout partner - in which case, you would find out once the partner in question has been introduced to you.
- Use a third party aggregator (for which a correspondent tie-up agreement would be required)
- You bring in your own licensed provider, in which case, the robustness is on you, and you would still need to have your payout MTO in PH to have a correspondent tie-up agreement with the PLH in the US.
You set the end customer fees. You can see this under the "Resources" tab on https://faisalkhan.com/raas, where the calculations have already been provided in detail.
The sponsors can either be licensed financial institutions (i.e. Banks) or Money Services Businesses that hold the necessary money transmitter licenses for the various US states.
The Remittance platform can be owned by you, or them. If the remittance platform is owned by you, then it implies you are using their API to work with a UI/UX that you have developed.
If it is owned by the provider, this implies that you are utilizing their white-label (mobile or web, or both) services.
In either case, the processing and compliance is handled by the principal license holder (PLH) that is sponsoring you.
In all instances, the identity of the sponsoring organization is not disclosed, until you have a signed contract with us, and have paid the one-time (non-refundable) application fees, as well as the advance (refundable) deposit on the referral fee.
Please go through the financials under the "Resources" tab and on the main page. They are very clearly mentioned there. https://faisalkhan.com/raas
All costs are mentioned on the financial page on https://faisalkhan.com/raas/ and you can also refer to this calculator https://nomisma.digital/pricing/remittance-as-a-service-raas-pricing/remittance-as-a-service-raas-comparison-table-v2/
For the first option, yes, if you bring your own payout partner (Bank or MTO), the FX gains are yours.
May I humbly request you watch these two videos? They explain the concept of what correspondent tie-up agreements are - very well.
- What is a Tri-Party Correspondent Tie-Up Agreement
- What is a Correspondent Tie-up? & Why is it necessary?
As far as the second option is concerned, the FX handling is absent on the US (load) side and is only applicable on the payout side. And this matters on how you have positioned it, whether you use your own payout partner or not.
The sponsor only deals with USD.
You will be charged for fraud. The onus would be extended to the end operator (white-label or not), which is you.
As per RAAS (without a payout partner), the rates as provided by the sponsor would be applicable. The main settlement is always in US Dollar. The FX gains is that of the RAAS customer and the Payout Partner in question, which varies.
Our scope of work includes:
- Reviewing all state applications for license requirements;
- Providing a detailed overview and explanation of each state’s requirements with appropriate Company personnel;
- Coordinating with appropriate Company personnel on any information that is needed from their end to complete the applications;
- Provide best practice recommendations on any items the Company may not know the answers to;
- Coordinating with the Company’s Registered Agent company to obtain all necessary state Business Registrations (and any other items/information needed from them);
- Coordinating with the Company’s Surety Bond provider to obtain all necessary bonds;
- Obtaining and filling out all application forms (Company and Officer forms);
- Coordinating with Company Officers and setting up any required fingerprint appointments;
- Submitting all required documents in the National Multi-State Licensing System (NMLS);
- Submitting all state applications in NMLS;
- Completing all paper applications & mailing to the state regulator(s);
- Creating accounts for any state(s) that have licensing systems outside of NMLS; and
- Coordinating directly with all state regulators on any follow up questions or documentation needed once the initial applications are submitted.
We typically like the client to have prepared a basic business plan so that we can assist them in tweaking it a bit. We can also provide a basic guide on what should be included.
As you can see we provide a very thorough service. Although there is no guarantee that you will be granted a license, but that is most likely if you are not able to satisfy /provide all the required information to the state regulatory authority.
Yes, you can be anywhere in the world. If you are outside the US, then the solution provider will most likely need assurance on how you will be able to make payments to them and not default on the contract.
We are program brokers. We do NOT hold the license. We have representation agreements with the PLH to source clients for them.
You would need to have been operating for over 3 years with excellent audit recommendations to even be considered for an Agent status application with a US bank. Without three years of audit, no US bank will be providing you sponsorship services under an Agent agreement.
We are actively working towards the offering. There are two available paths, one of integration and one of a hosted white label. Both are offered. However, the issue that currently stems are as follows:
(a). Payout is only limited to the countries where the UK & EU Principal License Holder (PLH) has arrangements, i.e. where they have a correspondent tie-up agreement with their payout partners.
(b). The PLH is not yet willing to do a 3rd party tie-up correspondent agreement. We are working on it and it should be done.
(c). The PLH for the UK is separate from the PLH of the EU.
The offering will be hopefully offered by end of Q1, 2022.
Depending on your prior operational capacity and understanding in the United States market, the number of states varies from solution provider to solution provider. In almost all the cases, TX, CA, and NY are included as these are the key states.
With our solution provider, we can offer TX, CA, and NY + 30-35 states, full nationwide coverage.
Actual results are based on your detailed application and likelihood of approval.
If you bring in your own payout network/partner, and such a payout network/partner would have a correspondent tie-up agreement with the PLH (Principal License Holder) in the UK/EU, then the FX price, gains, etc. are all set by you. If you do NOT bring in your own payout network/partner, then the FX, etc. are all set by the PLH. Your commission would be governed by the wholesale price they offer in the package, which you would be accepting.
May I humbly request you watch these two videos? They explain the concept of what correspondent tie-up agreements are - very well.
- What is a Tri-Party Correspondent Tie-Up Agreement
- What is a Correspondent Tie up? & Why is it necessary?
The best-case scenario would be Q1 2022. We are actively working with providers for the same, but with remittances, it is not easy. But that is the time frame we are committing to, for Person-to-Person P2P remittances. If you want to launch Business-to-Business B2B payments, in EU, that we can do today, but it will not allow any P2P payments.
Not sure what price you are referring to. Each territory comes with its own set of pricing. We currently do NOT have our prices public for the UK and EU. We are working on making this public (as it is the case with all our pricing).
Each geographic region comes with its own referral pricing. There are no group discounts or conversions on the territories as far as our referral pricing is concerned.
Not yet. We are still wrangling with the compliance portion of the solution and architecting that. The pricing is usually followed once the compliance portion has been okayed by each concerned party, etc. So, detailed pricing is not something we would be posting before Q1/2022.
Yes, we provide compliance management/consulting, it depends on what specifically you are seeking. Under a sponsored program, compliance is offered under the umbrella of the entity that is sponsoring you. So it remains to be seen what your overall structure and flow of funds will be and if compliance is needed from your end and if so, where and how much.
We cannot comment on this. TMS (Transaction Management Systems) and AML (Anti-Money Laundering Systems) are provided under the API/guidance of the sponsoring institution. We've not seen your case on the flow of funds, so we cannot comment on it. If your software is to be taken into consideration, the sponsor would be having a word with you on this, not us.
Almost correct. The option we are presenting is digital. You can even (technically speaking) run a white-label operation that is non-digital, but we don't offer that. But yes, Option # 3 allows you to run a digital platform where the custody of funds are handled by the MSB/PLH directly.
The amount you commit, in the Starter plan, are the funds you commit directly to the solution provider, the one that holds the MSB / MTL licenses. Not us. This is only achieved after you have signed up with them. The amounts represented are an absolute minimum.
It is extremely easy to come from the outset and say that we will not be competitive, etc. If that is the case, we would urge you not to proceed ahead. This solution is for those that have been in the business, have a time and commitment towards growing their business, but do not have the time and the financial resources to obtain the 50 money transmitter licenses in each state, which cost well over $2.4 Million and will take almost 2 years. Anyone who is willing to sponsor you will do so on their terms. The prices mentioned on the website are firm and final, not only from our side but also from the solution providers' side.
Your exposure is the non-refundable application fees. If you don't sign up with the solution provider, your US$ 7,500 fee is refundable. All other fees are ONLY payable directly to the solution provider, should you sign up with them, at the agreed rates, etc.
Unfortunately, neither we nor the solution provider will negotiate. The whole objective is to make it less back-and-forth which is why we shared the kind of information we have shared (which NO one in the industry has put out).
As you are not touching the funds, this does not make you a money services business and hence, registration with FinCEN is not required (this is our opinion, however, IANAL: I am not a lawyer, so please see professional legal advice). Your payout partner (may, and we are not experts in this opinion) may be required to register with FinCEN, but under the general RAAS offering, FinCEN registration is not required.
Yes. Subject to the assignment, we do. Our co-founder & chief compliance officer is a Ph.D (Dr.) in Anti-Money Laundering and Counter Financing of Terrorism.
You can see the cost of authoring a custom compliance manual for you here: faisalkhan.com/pricing/money-transmitter-license-application-cost
Correct. You would need a basic understanding of compliance, but essentially compliance is provided by the MSB/PLH via their API.
There are a couple of differences between an agent and a non-agent in the European EMI licensing regime.
A non-agent for starters is commonly referred to as an operator-led model. Where the operator of the license is handling all the facets of custody of funds, compliance, reporting, etc. The non-agent is essentially responsible for marketing & sales, including the first level of customer support.
For an Agent led model, there are essentially two:
- EMD - Electronic Money Distributor, and
- RA - Registered Agent
You can see a detailed comparison I did on this earlier on at: https://faisalkhan.com/delegate-status-comparison-table/
The main difference between the two is that an EMD can only resell the services that the principal EMI is offering, whilst an RA can create new products/services that the RA can sell, with the approval of the principal EMI.
This is widely debated. The short answer is that they can provide limited money transmitter license coverage, for their own products/services and that too in a limited number of US states that recognize the charter of the Trust company in question.
For example if you want to start an over the counter bitcoin trading services, OTC services very much require a license if the "intent" is to buy from others and sell on to others, where your eventual role would be that of an intermediary.
Also, you need to understand that Trust Companies are recognized in certain states and are not recognized by others.
This depends on where the original charter of the trust company is and you can ask (legally) if a reciprocity agreement between the trust company's original state (from where the charter was issued) and the state in which it is doing business, as valid reciprocity and is recognized.
You are well within your rights to ask them for a legal opinion showing such reciprocity.
In our opinion (and remember we are not lawyers), we do not believe a Trust Company’s charter only can be used to cover other businesses for MTL coverage, i.e. business that would be classified as an MSB and would require a money transmitter license, cannot rely on a Trust Company’s charter and then assume they can be covered for it.
States like Texas, California, and New York do not recognize such arrangements. In our research (in 2021) we feel today a Trust Company can provide semi-coverage anywhere for 12 to 14 small US states.
If any Trust Company provides you with the explicit understanding of your business being covered under their Trust Charter, please do ask them to provide this in writing explicitly for your flow of funds. It would also be very helpful to get a legal opinion on this as well.
Crypto-as-a-service or cryptocurrency-as-a-service (CaaS) has not yet fully been defined. It can literally mean any sort of Software or Platform as a service related to the crypto world. In the broader sense, Crypto-as-a-Service, is the ability to launch a crypto related product/service, with the service provider providing not only the platform rails, but also the regulatory (read: licensing) and compliance rails as well.
For example if someone is trying to launch an OTC (Over-the-Counter) Bitcoin Trading Desk, then a CaaS (Cryptocurrency-as-a-Service) would imply that the solution provider is able to provide the platform rails (i.e. API), custody of funds handling, licensing, compliance, anti-money laundering, KYC/KYB, and reporting requirements at a very minimum.
This allows businesses who wish to build products and services to go to market quicker and be fully compliant with the local laws and regulations.
No. In certain US States like New York for example, a BitLicense is required to trade in Cryptocurrency related services. In addition to the NY Money Transmitter License, you would require a NYDFS issued BitLicense to operate within the crypto domain in the state of New York.
Other US states are also slowly putting a fence around crypto related activities in their state. It is expected that most US States will require some form of additional licensing in the near future, when you apply for a money transmitter license from them. Whether it is embedded within the license or as an added extension, remains to be seen, however, with strict guidance coming from the Department of Treasury to regulate crypto, it is only a matter of time that additional licensing would be required for crypto related activities.
You may be exempt from money transmitter licenses only in the state of Montana. Because you have an exemption in the state of Montana, does not mean that you can offer your financial services nationwide. The exemption is only valid for the state of Montana and Montana alone. This means that the transaction must originate within the state and terminate within the state of Montana. It cannot traverse or transit outside the state of Montana without additional licensing.
Unless your business is absolutely restricted to the state of Montana, you would require a money transmitter licenses in the other US states where your customers may be.
You can. There is no specific advantage per se. You can still be an Irish company, that is domiciled physically in Ireland and still have full ownership and operational control of your license. The only requirement as posted by the Bank of Lithuania (BOL) is that the CCO/MLRO (Chief Compliance Officer / Money Laundering Reporting Officer) has to be a Lithuanian native, ability to speak the Lithuanian language, and be physically based inside of Lithuania for reporting and operational purposes. The rest of the office/crew/ops can be outside of Lithuania.
Depending on your status, (incumbent or not, how much you understand the business, due diligence documents, etc.) anywhere from one-to-three weeks to find one. To signup with one, anywhere from two-to-four weeks. It also depends on the territory/geography that you are interested in.
What you are trying to do is referred to as an OTC (Over-the-Counter) Trading Desk. Whether you purchase the coins from an existing purse or from an exchange in real-time when the client purchases, the deal is the same (in our opinion), and in such a case you would be running/mimicking an OTC trade.
Any OTC trade like business requires that you:
- Register with FinCEN (Financial Crimes Enforcement Network)
- Under certain tokens/coins, you might need to have the regulatory licenses as offered by the SEC/FINRA (Please note, this is not our area of expertise and hence we cannot advise on this)
- Have the necessary Money Transmitter Licenses and/or Cryptocurrency Licenses (where applicable) in the US States from which you are signing up customers and doing business with them.
- Adhere to various state and federal guidelines (including reporting) for anti-money laundering, counter-terrorism financing, PATRIOT Act, Bank Secrecy Act, etc.
- Depending on your flow of funds and transaction specifics, you may require a license in either one state or multiple states.
No. We are not allowed to share this. There are a few providers that we work with, and we are constantly evolving and changing the agreements, so we simply do not get involved in that.
If the sponsor is sponsoring you for license/regulatory coverage in the US, then the client legally belongs to them, this means, the KYC data lies with them. Unlike Europe and (UK, pre-Brexit), the PII (Personally Identifiable Information) was passport-able. That is not applicable in the United States. This implies that customers signed up in the United States, their KYC information belongs to the PLH (Principal License Holder) unless you are an Agent, in which case, you may have the right to KYC the customer, but the PLH will always retain the right to have KYC information.
If you interact with a customer outside the United States (in-bound or out-bound) transaction flow, then the PLH has the right to ask you for KYC data to know the counterparty of the transaction.
You can be, it depends on the sponsoring organization and how they would like to structure your deal. Ideally, everyone wants simplex to complex. Agent relationships are mid-way complex.
Yes, we do and it takes a few weeks for it to be completed. In the Pricing section of our website, our pricing for FinCEN registration can be seen. (See: faisalkhan.com/pricing/money-transmitter-license-application-cost)
The biggest advantage is that of issuance and operational cost. Barring the UK (which is no longer the epicenter for EMI licenses in Europe), the competition is essentially between Ireland and Lithuania. Lithuania is by far the most preferred choice for EMI license issuance (and then also for digital banking license) in Europe. It surpasses Ireland (for the issuance of EMI licenses) many times over.
On the operational costs, the will, and determination of the Bank of Lithuania (Central Bank/Regulator) to be at the forefront of fintech licensing have put Lithuania fairly and squarely on the map. It is much more economical to operate in Lithuania and get licensed from there, versus Ireland.
It depends. Typically, the answer is a no. Unless the arrangement is as such where you would be given a bank account as part and parcel of signing up, otherwise you would have to source your own bank account (especially when an agent status is involved).
No, not for B2B. RaaS, at present, is limited to consumer remittances, which implies person-to-person transfers only.
Yes. If you do not have a correspondent tie-up with the business in Venezuela on your Florida license (as a Money Transmitter License Holder), you cannot unilaterally send such money across. You need to have a correspondent tie-up agreement in place before this can happen. If you do not know what a correspondent tie-up agreement is, two explainer videos are mentioned below.
Trusts have a charter, they do not have a money transmitter license. However, as a Trust company, they can offer "limited" custody services within their services realm. Also, understand that Trust Companies are recognized in certain states and are not recognized by others. This depends on where the original charter of the trust company is and you can ask (legally) if a reciprocity agreement between the trust company's original state (from where the charter was issued) and the state in which it is doing business, as valid reciprocity and is recognized.
In the event you are receiving money (as an intermediary) from Exchanges or other non-banking financial institutions, you would need to have some sort of a correspondent tie-up agreement, else, you would be aggregating or better known as, nested transactions. Accounts on crypto exchanges would have to be in your name also.
No, the US government does NOT recognize a license outside of the United States to be consumed/used within the United States in lieu of a money transmitter license.
OTC services very much require a license if the "intent" is to buy from others and sell on to others, where your eventual role would be that of an intermediary.
No. It is not.
We work with quite a few solution providers. Some have a few licenses, some have key licenses (like New York, California, Texas, etc.) and some have licenses in all 50 States. In many instances, we have a few providers who work together and pool in their licenses to make a single offering through their Program Manager. Either way, each party will carefully review your application and then provide their answer if they want to work with you or not. Many-a-times, the opportunity is too small (because the customer is a start-up), and often we are asked if the client has a decent understanding of the business (domain knowledge, subject-matter). If we give a medium to a low score, many solution providers decide against working with you, because of the fact, that from a time invested point-of-view, it might not be worthwhile for them to continue with you. So, nationwide is not guaranteed. Before you get to sign a contract, your sales associate will let you know how many states (in reality) would be covered.
Of course, it can. Let’s say a couple has US$ 2,000 in the account. The husband decides to send US$ 1,000 to his parents in India. You do a balance check and it shows you US$ 2,000. Unbeknownst to the husband, the wife earlier wrote a check for US$ 1,200 that was cashed later on that day. Now the available balance would be US$ 800. When the ACH file is sent for processing later in the evening. It will be an NSF (Non-Sufficient Funds). This is just one example.
Yes. The merchant account application fees go towards underwriting of the bank or payment facilitator that would be underwriting your merchant acquiring business.
In the United States, ACH is subject to abuse, because of the way it is structured.
ACH transactions can be reversed up to 90 days after they appear on the statement. This protection is guaranteed by law to the consumer. Unfortunately, the society we live in will always have nefarious players, who will take advantage of this and do a transaction and then reverse it. For regular and same-day ACH, the onus (burden of proof) of proving the transaction was genuine and was executed in good faith lies with the merchant and not the consumer. Solution providers will require you to place money in a reserve, that would be used in the event of a chargeback. When a chargeback occurs, the money will immediately be taken out from your reserve and paid to the customer’s bank. They will hold on to the money until either the chargeback dispute is settled in favor of the customer or after investigation, the chargeback dispute is in your favor. Either way, the money needs to be provided to be held in escrow, and that money comes out from your reserve.
Pre-funding is simply your spending limit. Unless of course, you bring your own payout partner in the beneficiary country, you would need pre-funding. We did a small video that explains the basics of pre-funding, which you can view here: What is pre-funding and how does it work?
Please also be cognizant of the Minimum Commitment (under your plan).
No. You cannot unless you are a certified Payment Facilitator (PayFac) yourself. When you bring your own credit card processor, then you are essentially inserting yourselves in the flow of funds, that is the one thing you are trying to avoid and hence seek sponsorship from a principal license holder so that you can get coverage. You do not want to touch the money. When you bring your own credit card processor, the card processor has a contract with you and would deposit the money into your account, as opposed to the account of the solution provider. This implies you have now access to 3rd party funds and you, yourselves would now need to be licensed. The only way out of this is for the solution provider to have a direct agreement with the card processor (which they do) and they, the solution provider handle and touch the 3rd party funds on behalf of the customers, and not you.
We don’t say anything. We sell a white-label service. We don’t sell a ‘lowest’ price on the web. This RaaS service is for those wanting to start their own business with full licensing and white-label. Ria doesn’t offer that.
There are two methods of going about this.
- Use the preferred payout partner that the solution provider has.
- Or bring your own.
We prefer #2.
In the case of #1, the only way we will get rates is if you sign the referral contract and pay the referral fee and application fees. Only then does our team go and get the rates for you. This shows the seriousness. We get a dozen or so leads a day, most of them are just duds or fishing for information or trying to learn.
We have to talk to each solution provider, and then ask them to provide the rates and then present them to you. Follow up in the event a solution provider forgets or becomes tardy. No use going into that without a commitment from the party. The contract is based on success, so if nothing works out, you take your fee back (sans application assessment fee).
No. That would be violating the spirit of the offering. You would have to upgrade your plan.
We do not offer a direct rate. The transactions are in Dollar only. Your payout partner offers the rate. If you don’t have a licensed payout partner, one can be assigned to you, and then depending on the solution provider you choose, you would be provided with the rate they give. Not us. It would then be a question of your comfort with the payout partner’s rates.
The process is quite simple. First, you would need to inform us of the enhanced countries you plan to cater to. Then, you will have to wait for the solution provider to confirm. Once that is done, we will then agree at some future date to switch you to the upgraded plan (with a lower transaction fee). You will have to pay our referral fee difference and that pretty much is it. The same is applicable to upgrading from Starter to Enterprise or from Pro to Enterprise.
The flow of funds is extremely important. You may have worked on it for months, Solution Providers usually glance at it for 5 minutes before making their decision. If you can elaborate on your Flow of Funds (FoF) and transaction set, it would help immensely. Also, we need it from you, for legal reasons, so that nothing was lost in translation and also, the way ‘you’ envisioned it.
You can draw it on a white-board or a white-piece of paper. Use your mobile phone to record while you explain what all is going on, how the transaction is originating, and how the transaction is terminating.
Once you’ve done this, you can WhatsApp us at +13129576797.
Yes, aggregators have to be approved. They would go through the same due diligence as a correspondent tie-up would and they too would need to sign a correspondent tie-up contract with the Principal License Holder. The approval times depend on the complexity of the tie-up and the organizational setup of the payout partner (banks are much slower than money transfer operators). Assume it would take 1-3 months.
The whole purpose of the referral agreement is for us to 'broker' the deal for you. We only disclose the name of the solution provider once you have signed the referral agreement with us and also have paid the application assessment fee as well as the 25% advance (refundable at the time of signing of the referral agreement. Once these two items have been credited to our account, that is when we will disclose the name of the financial institution to you and make a formal introduction and do the hand-over.
If you are already talking to the financial institution, we would be notified when we disclose your name to the licensed financial institution. In which case, we will let you know that it would be up to you if you wish to continue with our efforts or not, considering we usually have leeway and leverage with these institutions.
Unfortunately, we cannot accommodate you on this. Our fees are fixed and are public (https://faisalkhan.com/pricing). We are the only ones in the industry who actually publish rates out in the open and do not charge based on the propensity to draw out whatever possible from you. Regretfully, the discount you seek would not be possible. We do, however, have a schedule to adhere to. If the fee is US$ 28,000 then the breakdown of the fee is as follows:
- One-time Application Assessment Fees (non-refundable): US$ 1,500 (at the time of signing this referral agreement)
- For Licensing Coverage: 25% of the agreed amount upon signing of the referral agreement: i.e. US$ 7,000 (refundable 100% if no approval is sought).
- Another 25% of the agreed amount due upon due-diligence completion: i.e. US$ 7,000.
- Balance 50% of the agreed amount due at the time of signing the contract with Solution Provider: i.e. US$ 14,000.
Yes, you can start with a company that can be registered pretty much anywhere in the world, however, US-based entities are preferred.
No. Nothing is guaranteed unless you have gone through enhanced due diligence (EDD). The solution provider initially approves your case on the condition that your due diligence would be clear/clean. Typically if you have no worries about your operating model and your due diligence, there is usually no reason to be worried and your approval would most likely happen.
The answer is No. The settlement partner (if provided by the solution provider), then the settlement account is already taken care of. You would simply need to provide us with a bank account for your commissions where they would be deposited.
If the settlement partner (or payout partner) is one that is suggested by you, then the payout partner has to first have a correspondent agreement with the solution provider. Once that is established, the payout partner must either provide a Nostro account in the US (in their name) or a bank account anywhere else in the world, with the account title in their name.
The licensed financial institution does indeed provide an API stack that you would be working and integrating with. In most cases, your billing will start the moment your API goes live. Some institutions have a sandbox environment that allows for 'most' of the development to happen without going live and some do not have a sandbox environment at all. It all depends on one solution provider to another.
The licensed financial institution that we would introduce you to would be a bona fide US only licensed institution, catering to US-based only customers and transactions (unless otherwise specified).
Typically, finding you a solution provider takes about 10 business days. The actual sign-up process, once a solution provider has decided to accept you in principle is about 3-5 weeks for due diligence to be completed on you. There is no concrete number on this time frame. Depending on the load with the compliance department, and the licensed financial institution in question, this could be as short as one week and as long as five weeks. Once the approval is granted, signing the contract with the licensed financial institution on the agreed term sheet and contract as provided by them, typically takes between one to two weeks maximum.
The US$ 25,000 is charged by the financial institution we work with. It is their onboarding cost for crypto-related projects. It is a one-time, non-refundable fee that is charged by them.
The US$ 5,000 monthly fee (monthly recurring) is the fee charged by the financial institution that would be sponsoring you for your crypto project. This is a fee that is paid to them, regardless of the amount of business you conduct through them. The fee is tied to a contract term that is defined by the solution provider.
Typically, it would be a 12-month contract (at the very minimum), however, most will try to get a 3-year contract out of you. This all depends on which solution provider will eventually take your case.
Yes, this is what our banking partners prefer. The armored car service would pick up the cash, deposit the money into their own account and then, preferably, Fedwire the money to your bank account (which we will provide).
The reason for this is simple. The discounts being provided to you cannot be made public. They are under a contract with us. Hence from the point of view of the Chief Revenue Officer of the bank, they do not like signing agreements with heavy discounts (think more than 60%) off their rack (published rates). We, on the other hand, have an exclusive contract with the financial institution and that is why we bill you monthly. Then, we pay the bank their share.
Yes. The institutions have been prescreened and verified, specifically for the MSB related business and in particular the cryptocurrency ATM business.
Each banking institution has their own sets of rules to do due diligence on your company. We cannot provide any such information or pre-requisites. You would fill out the application of the institution and from there onwards, we would pursue your case with the financial institution towards a successful approval.
In many cases they do, but this is something our banking partners want to avoid. They do not want to unnecessarily sign up with armored car carriers. So consider this request a deal-breaker in many cases.
If you have a licensed payout partner, you would need to tell them, that you are willing to bring international remittances business to them, however, the US counterpart has requested to have a correspondent tie-up agreement (or payout agreement) with the payout partner and in this case would like to get in touch with you, i.e. the payout partner.
No. Transactions are authorized by the parties involved, i.e. the Sender, the banking institutions, processing partners and the payout beneficiaries. As a non-licensed entity (you), you are not involved in flow of money or its authorization. The whole idea of a sponsored & white-label arrangement is to make sure that the licensed entities involved are the ones who engage in the authorization and flow of funds for the objective that you are seeking under the white-label service.
The principal license holder (i.e. the solution provider) is responsible for it. Not you. The API has the KYC mechanics built into it.
You are essentially an ISO, and Independent Sales Organization. An ISO with a white-labeled app/website to bring in sales traffic to the licensed providers, for them to process these transactions on your behalf, without you being involved in the legality movement of money.
Predominantly, as a company, that is bring provided with remittance-as-a-service (RaaS) as a white-label solution you have three primary responsibilities:
1. First level (Level I) of customer support, your client will call you for support. You internally will have basic access to a dashboard to help resolve most of the queries and for Level II and Level III support, you will open a support ticket with the solution provider / principal license holder.
2. Your second responsibility is Sales & Marketing. Needless to say your brand, you would need to do sales activities to bring in the clients.
3. Third, you are responsible for keeping an eye on your pre-funded account (reserve), with respect to the number of transactions you are doing.
From a transaction processing and management point of view, you do not need a back-office as such.
If you have a licensed payout partner, you would need to tell them, that you are willing to bring international remittances business to them, however, the US counterpart has requested to have a correspondent tie-up agreement (or payout agreement) with the payout partner and in this case would like to get in touch with you, i.e. the payout partner.
Sorry we cannot provide this information. Our start and finish is limited to the objectives around remittance-as-a-service. The merchantability and/or the feasibility numbers around it, is something we do not provide nor comment upon.
Only for sales & marketing and level one customer support. Any additional staff you may hire would depend on what kind of a relationship you are maintaining, and if you are doing to be developing the app / website using the API.
Most of the solution providers have implemented various tools, such as bank login and balance check for ACH (address verification service) for the debit card, risk scoring on the users, etc., to mitigate risks.
However, remittances are considered ‘high-risk’ by the banks. This is why banks pass the onus of the fraud/chargeback to you, and hence you would be required to keep a reserve.
No business is fraud-free. To understand why there is a fraud, you have to understand that by law in the United States you are allowed to do reversals up to 180 days from the date of transaction (you can read up on Consumer Financial Protection Bureau).
Some people simply have nefarious intent. They will do the transaction, make the payout happen in the beneficiary country, and then claim, the transaction was a fraud, etc. Sometimes customers don't understand the charge on their statement and do a reversal without thinking it through. Sometimes, a joint-account is operated and the balance in the account may be $1,800 and the wife has written a check for $1,200 whilst the husband is trying to send $1,500 back home. An NSF (Non-Sufficient Funds) charge occurs. Regardless, the chargeback onus falls on you, as neither the bank wants to take it - neither the sponsor, i.e. principal license holder. While a lot many features are implemented to reduce the chances of fraud happening, the way the US structure for consumer financial protection is set up, it is prone to abuse. This is the nature of the business. You can argue, this way or that way, at the end of the day, the structure is as such, you are responsible for putting up the reserve for any chargebacks, till such time they are investigated, etc.
You can request a review for higher limits once you are operational and have 90 days of working history under your belt. No service provider is going to unilaterally allow you higher limits from day one. They would like to have a rapport with you and then together you can slow increase the limits as deemed safe by both sides from a risk point of view.
Your approach should always be Simplex-to-Complex. We recommend that you start with the Starter plan and then slowly, as your marketing and sales efforts pick up, you can upgrade to the Pro or Enterprise plan.
Whether you send money through a debit card or ACH, the minimum is US$ 50 and the maximum amount is set to US$ 2,000. Both of these are on a per transactions basis, i.e. minimum US$ 50 per transaction and maximum US$ 2,000 per transaction for both ACH and Debit Card processing.
Usually, the term is just referred to as ‘good funds’ only, but then the funds have to be settled as well. In many cases the transaction is done in one day, however, the actual settlement time of these funds might be T+3 (T=transaction date + 3 days). The phrase “good funds” implies the funds were good but subject to settlement, this is why the term ‘good funds and settled model’ is used.
A good funds and settled model implies that no credit is being extended, and the funds have been settled into the terminating (intended account). That is exactly how the model of remittance-as-a-service operates.
However, you cannot and are not allowed to operate this service by asking the solution provider to take the funds that have been settled and push these for further beneficiary delivery.
The US solution provider needs to see proof of delivery of funds (using pre-funding) and only then the funds are released from the United States.
When a transaction is complete, the US solution provider is essentially holding on to the funds (minus their commission). These funds can be pushed into the local US Nostro account (via FedWire), from where the payout partner will have control of the money, or if the payout partner does not have a US Nostro account, then the funds are sent via international wire transfer, i.e. SWIFT to the bank account in the name of the payout partner in the country of their choice.
All of the money is transferred here (minus the solution provider’s commission).
Yes. You can use the API which is provided with each package and build your own web &/or mobile app. You cannot build your own platform, as that is controlled by the solution provider themselves. They provide you with the APIs with which you can build the UI/UX based on the API stack available to you.
The solution provider’s white-labeled web and/or mobile app platforms are optional for you.
The daily limits can indeed be increased by increasing the reserve. They are effective the next business day once the funds have been received by the solution provider.
In the event you have your own payout partner (which has a correspondent tie-up agreement with the US solution provider), then the daily reserve requirement is not applicable.
All instances of remittance-as-a-service are white-labeled by de facto. The payout partner is simply the settlement processor with which the solution provider is working (i.e. the countries in which they are working and the specific types of payouts they are able to do).
Whether you opt for the API and build your own app, or use the solution provider’s white-labeled app, it has no bearing on the payout corridor. They are offered as-is.
The list of payout corridors can be seen here: Payout Corridor & Rates
Yes, you can. However, please be cognizant of two things. The solution provider may (or may not) accept your request for a correspondent tie-up. Though in most cases they will, they do have the option of saying no to you. Secondly, any pre-funding that has to be done, would have to be borne by you.
Typically a correspondent tie-up agreement takes about 3-6 weeks to be completed. Depending on the workload (on either side) this could be longer. Such timelines must be taken into account.
The correspondent tie-up is a formalized process and a contract. It is not something that can be rushed. The two videos mentioned below will help you understand how the process works.
The due diligence (DD) documents for a payout partner vary from each solution provider. You can read up more about the due diligence documents here.
Yes, you can propose your own payout partner. As pointed out in this FAQ, the process can be anywhere from 3 weeks to 6 weeks (depending on how busy the solution providers are). The due diligence can easily take 3-4 weeks. Usually, there are no costs involved.
A sample of due diligence documents requirement can be seen here.
You can, but only if you are a payment facilitator and have an agent-based relationship with the US solution provider. The reason is, when you use your own payment processor you are in the custody of funds and hence break the chain of licensure continuity. Your own payment processor is a contract with your company and your processor. The US solution provider is not a party to that contract and neither do they have a primary chain of custody to client funds. Hence, the answer is no.
At present, the list of payout corridors and their rates can be seen here.
As always, you can opt to bring in your own payout partner, but you must have a correspondent tie-up with the US solution provider.
Yes. The money can indeed be sent outside the US, but only to the designated bank account. This account must be in the name of the payout partner with whom the US solution provider has signed a correspondent agreement.
No. As per the Terms of Service of these providers, collecting money for the purpose of international remittances is not allowed. If you are classified as a money services business and/or are engaged in money transmission, then, you cannot use their services for receiving &/or sending money without first obtaining a no-objection certificate from them. If you do, both, your user and you would be in direct violation of the various terms of service, and the account(s) and the monies can be suspended and forfeited respectively.
You might want to watch this brief video for further clarification:
[103] 3rd Party Payment Apps? It Might Be Illegal To Use Them!
No, B2B transactions are not allowed under ‘remittance as a service’. The model is purely for P2P (person to person).
You can but only if one condition is met. The bank account to which the money is being sent must be in the same name as the payout partner with which the US solution provider (i.e. license holder) has signed a correspondent tie-up agreement.
For example, if there is a payout partner named ABC Transfers in Kano, Nigeria and they request payment to be made in Europe or China into a bank account of their choice, this cannot be done. The bank account has to be in the name of ABC Transfers, else the US solution provider will not agree to the transfer.
Transfers cannot be made to 3rd party bank accounts.
Yes. Upgrade is simply a matter of paying the differential. The revised rates take up to five (5) business days to take effect. With respect to payout corridor, technical and development perspective, the solution provider will review and provide fresh time lines for those (if applicable).
Sponsoring principal license holder only deals in the US Dollar. The FX rate is provided by the payout partner and the cost of termination is also provided by the payout partner (assuming the principal license holder has these arrangements in place). For example in the current RaaS provisioning, these are the payout corridors and countries.
Needless to say, there are three scenarios that can play out here:
Option # 1. You do NOT have a payout partner relationship in the country you want to payout to, so then you would be using the rates provided above. The FX rate would be provided directly by the payout partner and you are free to adjust your margin accordingly. The termination rate is also provided by the payout partner and you are free to adjust your margin accordingly.
Option # 2. You are in the process of getting your own license in the payout country or are seeking a relationship with an existing licensed payout partner, till such time, you will bank on Option #1. When you have acquired your own license or have a candidate payout partner, you will request the solution provider (i.e. principal license holder) to start due diligence of the candidate payout partner and then start the necessary paperwork on the correspondent tie-up agreement.
Option # 3. You do not want to work with an existing payout partner and you already have a candidate payout partner. In which case, you will request the solution provider (i.e. principal license holder) to start due diligence of the candidate payout partner immediately and then initiate the necessary paperwork on the correspondent tie-up agreement.
The referral fees is clearly mentioned on Remittance-as-a-Service Pricing Page and on the Comparison table page.
Pre-funding money is always put up by the entity that is generating (or originating) the transaction. In this case, the solution provider is generating the transaction, but they are doing so, for you, on your behalf, as you want to be in this business. As that is the case, you will have to front the pre-funding money. No solution provider is going to put up their own capital for you to benefit from. If you were to get your own licenses in the United States, would you not have to put up the pre-funding money in the payout countries? So, the same scenario here.
It depends.
If you plan on developing your own App (be it mobile or web), you will then have to use their API. Everything is provided for by the solution provider, so that they manage the compliance, payment processing & settlement, transaction management, ID/KYC, etc. You simply have to use their API and develop your UI/UX on top of it.
In other options, you can use their white-label website (which is a responsive website, i.e. will work on the mobile as well as on tablet). You can also opt to use their white-label mobile app only. Or you can use both. It all depends on what you are comfortable with and what you opt for.
The pricing for these four options can be seen here.
There are two scenarios in which this can be played out:
(a) You are a licensed payout partner with a direct correspondent tie-up agreement with the US solution provider (i.e. the license holder). In this case, you, as the payout partner, ‘may’ have (on your own arrangement) a bank account in the United States, held with a licensed bank to receive money in. This account is designated as a Nostro account for you, the licensed payout partner.
The US solution provider (i.e. the license holder) that is holding on to your funds, can now push the money into your Nostro account and then that money is now considered ‘delivered’ and settled to you. For the US provider, there is no international SWIFT / Wire transfer. The settlement is quick and usually on the same day (if not the same hour (if Fedwire is used).
(b). In the alternative scenario, you are a marketing company that is managing and running the remittance-as-a-service program. The US solution provider already has arrangements with a payout partner (whether through you or not, is irrelevant), and as before in the above-mentioned case, the funds held for the payout partner will be pushed to the Nostro account of the payout partner.
You, as the entity that is running the remittance-as-a-service program, can request the solution provider to push your ‘commissions’ into a bank account that has the same title as your company’s name. This bank account could be in the United States or abroad.
Almost every solution provider that we work with, is cognizant of the market prices. It would be meaningless if the rates provided to you were not in line with what the market demands. The wholesale rate provided to you is very price competitive. Enough for you to make money on top, whatever margin you wish to secure. There is nothing in the process that would make you sign up and only later you find out you are in a contract with really bad rates with which you cannot compete. The negotiation and rate transparency between you and the solution provider will be direct. It is up to you to determine if what the rates being provided to you, is something you would like to sign a contract on.
The solution provider is. That is the beauty of this setup. You are not legally responsible for any such issues as AML, CFT, PF, KYC, KYCC, CIP, Compliance. All the 3-letter acronyms you can throw at it, the service provider is responsible for it. You are not responsible for such areas.
Needless to say, if you are a licensed entity, then you are responsible for regulatory compliance.
Depending on the package you choose, the number can vary from one to many. Please see the Remittance-as-a-Service (RaaS) Comparison table for more information.
The introducer fees are more than just finding a licensed financial institution for you to work with. It typically involves a few hours or pre-screening work and then an equal amount of work goes into talking with financial institutions who will sponsor you for your business case. Once the introduction is being made, you will have direct access to the LFI (licensed financial institution) to conduct various activities like sign a non-disclosure agreement with them, perform due diligence (both ways), look at the legal drafts of the contracts you will be signing, share your transaction set, the flow of funds, have a look at the API (for tech integration) and negotiate & discuss your term sheet.
Yes, an API is provided for you to do your own development on. Your app will be powered by the service provider’s API should you decide to build on top of it.
As per the CFPB (Consumer Finance Protection Bureau) and the way state regulators would look at this, they would like the funds to be released only after the payout party has been paid, i.e. the beneficiary has been paid.
This is why pre-funding is used.
The license holder holds back on the funds, till such time that proof of delivery is provided for by the payout party. The funds good and settled model is already in play, as no credit is being extended by the solution provider (i.e. license holder) to you, and only the funds that are good and settled are pushed into your account, after proof of payment has been provided.
This depends vastly. In many cases, the Principal License Holder (PLH) is doing settlement with you in US Dollars only with their Correspondent tie-up. That is to say, they are NOT providing the FX rate.
How does this work? Well, there are three possible solutions to it:
(a). The customer, i.e. the RaaS Client, i.e. you, is not licensed in any part of the world and will be dependent on the PLH’s arrangement that they have for payouts in the various countries you have opted for. In this case, the PLH’s correspondent partner for payout will set the FX rate, and you would have to agree on this (needless to say, you can add your margin on top when you quote to your clients). As the PLH is doing an end-to-end settlement, the rate would be very transparent to you and this rate can vary. Depending on the corridor, the rate could be better than the interbank or mid-market rate, or not.
In most cases, the PLH does not have a say in the rate and they honestly do not care if the rate is Mid-Market, etc. as they make their money on the volume.
(b). In the second scenario, the RaaS Client, i.e. you, may want the solution provider to work with an alternative provider, with whom the solution provider may not have a relationship. Once the relationship is established (between 1-3 months), then you can benefit from the rate. Mid-market rate or the interbank rate is in many cases usually not available, as for that to happen, transaction volume needs to be high. This is not always the written rule, your mileage may vary depending on the corridor and the payout partner you work with.
(c). In the last scenario, as a RaaS client, you are licensed and hence you are providing the FX rate to the PLH. In this case, the rate is 100% transparent to you and the FX gain is yours and yours alone to keep. The PLH has already charged you either on the card processing or the ACH for your transaction.
Yes, your daily limit corresponds to the reserve. If you increase the reserve, the daily limit for the Starter package is equally raised. The minimum value is US$ 5,000 in reserve. There is no upper limit.
You can be incorporated anywhere in the world. You don’t necessarily have to be incorporated in the geography from where you are seeking license umbrella coverage. Though it helps to make things a lot easier if you are incorporated in the same country, but it is not mandatory.
There are two options you can exercise:
Option A: The PLH (Principal License Holder) may already have an existing relationship with a settlement and payout partner in the beneficiary country. This option can result in one of two scenarios:
- You like their rates/network, and decide to carry on.
- You do not like their rates/network and decide not to carry on with their existing provider and ask them to reconsider option B.
This brings us to Option B:
You can request the PLH to establish a new correspondent tie-up with the preferred partner you would like them to work with within the beneficiary country. Please ensure this during the time of your negotiation with the partner. The PLH reserves all rights not to enter into an agreement, however, in most cases they oblige if you have a solid case.
There is no restriction. You will be treated as an ISO (Independent Sales Organization). You will not be getting a license in your name. You would essentially be ‘sponsored’ for a license that someone already has and they would be the program manager for your company’s product/service. There is no restriction on the ‘type’ of company you might have. An LLC is as good as an Inc. It is important to note, you are not operating as a money transfer company. The PLH (Principal License Holder) is. They have the licenses. What they are essentially doing is running the program, under their licenses, for your brand.
You can even be based outside of the United States. There is no compulsion to be incorporated and present in the United States.
We have provided detailed pricing for the cost of Remittance-as-a-service.
You can see the monthly cost options, and sample calculations for US$ 250, US$ 500, and US$ 1,000 on their respective pages.
This is a tough question, it depends on which provider will work with you. Barring our fees (which can be a minimum of US$ 7,500 or a maximum of US$ 28,000) this is what you typically should prepare for:
(i) Reserve Requirement: US$ 5,000 (minimum)
(ii) Pre-funding Amount: US$ 5,000 (minimum),
(iii) One-time Setup Fees: US$ 2,500 (minimum), and
(iv) Monthly Fees: US$ 248/month (minimum).
If we take these amounts, then you’re looking at a minimum of US$ 23,000 approximately to go live. This is assuming you would make your own app (using the API) and also there is no room for sales and marketing budget.
This assumes that you will opt for the RaaS white-label pricing option #2. That is the minimalist approach. You give us your logo, and you simply market the website that would be white-labeled for you.
For example, your company is called ABCMoneyTransfer.com – then you market this website. The license holder will run and maintain this website for you. As you learn the business more, you can then opt to go on your own.
You can see the various RaaS pricing options here.
Other than the stated costs, we cannot answer that. However, we can tell you that you would need to have approximately US$ 75,000 to enter into the business (this includes limited pre-funding). Anything less would seriously stress your business, especially sales and marketing efforts.
The Starter package is developed predominantly for startups and new entrants. It allows an easy entry into the arena of the money transmission world with full licensing and compliance without stressing you financially.
Yes, they will have to go through the Due Diligence process and enter into a Payer Agreement.
The answer is, it always depends. But on average, you can be up and running in 4-5 weeks if all of your information, technology, and monetary factors are ready. Most clients are up and running in 6-8 weeks. Needless to say, if you are opting for the API solution and building your app on top of the API, then it comes down to your technical capabilities on how efficiently you can build your app and then present it for an audited approval by the PLH (principal license holder).
The reason is simple, economies of scale. The more business you provide, the lower (or better) the rate you get. This is not only true for the money transfer business but is true for any other business you might venture into. As such, the three packages for Remittance-as-a-Service that we have developed, have a slight (albeit noticeable) difference in rates. The lower the barrier to entry, the rates are high. When you provide more business to the solution provider and pay a higher monthly charge/commitment, then the rates are reduced for you.
Limits in the starter package are directly 1-to-1 proportional to the pre-funding deposit you place. If your pre-fund deposit is for $5,000 then you get a daily limit of $5,000. The $5,000 per day limit is the minimum. If you place a daily deposit of $15,000 then your daily limit is set to the same amount.
You can certainly switch, that option is available to you. However, once you switch, the rates and conditions applicable of the new RaaS plans would be applicable to you. Whether it is a net benefit for you or a net loss, please do your calculations prior to switching.
The new and revised pricing packages for RaaS are currently only available for the United States. We will be expanding this to Canada, United Kingdom, and Europe as well in the coming months.
If by access to banking you are implying do we provide a bank account in the US for the commissions &/or customer funds to be pushed into – the answer is no.
If you are an ISO, you would need to make arrangements in the US to have your own company incorporated and have a US bank account to receive commissions, or for the solution provider to either SWIFT (international wire transfer) the money across to the correspondent’s bank account in their payout country, or the correspondent may have a Nostro account in the US.
Either way, access to banking is not provided for. You have to make arrangements for it, or you can contact us to separately provide you access to banking services.
It depends.
If everything is catered for and supplied without any hiccups, then the answer is yes. Otherwise, it usually takes between 3-4 weeks after the signing of the contract to be up and running on the simplest model, i.e. where you seek a white-label web solution, with no integration, and to a payout country that is easily approved.
Be cognizant, you would need to pass the due diligence before your contract can be signed. Due diligence on your initial application can take between five to fifteen days and this is a process no one can accelerate.
You cannot increase the payout countries until 90 days of being up and running. After 90 days you can request for a review.
Please refer to this frequently asked question which has more information: Who is providing the payment rails to the countries we plan to send money to?
The answer to this is not straight forward. The reason being, you are already tied into a commercial contract with your existing provider.
If you want, you can exit that contract, but that may have financial repercussions for early termination. Please check with your solution provider first.
In some instances your existing solution provider might be the very same solution provider offering these new remittance as a service pricing packages. If that is the case, there might be a possibility to downgrade or readjust your contract.
No, nationwide coverage is not guaranteed. We have to still present your case to the solution provider for approval. Based on which solution provider takes your case, that is the offer you will be presented with and any restrictions or deficiencies in the proposal.
Please visit the page mentioned below to get an exact assessment of what your monthly costs will be, based on the option you choose.
What is your monthly total?
Chances of being sponsored by a bank, as a fresh (new) start-up, are quite low, unless of course you are well-funded and are able to demonstrate that by keeping a hefty deposit in the bank. Barring that, the most likely sponsoring institute would be a money services business that has the requisite money transmitter licenses.
See this answer for the correspondent tie-up agreement.
If you do not have an existing correspondent tie-up agreement in place you can do one of two things:
- Start the necessary procedure to have a correspondent tie-up agreement in place, the sponsoring principal license holder will be happy to oblige to this. Do remember, that this is not something that happens in days, it can take a couple of weeks at best.
- You can find, either for the interim period or indefinitely, a third-party correspondent that already has access to the beneficiary payout country of choice.
In both cases, our solution providers would be happy to oblige.
Other than sanctioned countries, you can pretty much terminate transactions in all the other countries. Most solution providers (S/P) will NOT give carte-blanche approval to you to start in as many countries as you wish (regardless of your exposure or seniority in the industry). It is the absence of trust that will restrict, i.e. put an operating fence around the number of countries you can service. Typically, a sponsor will want to restrict you to five payout countries.
If you are able to establish trust (with a three to six month) operating history with the solution provider, then, needless to say, the S/P will happily reconsider if they see a promising performance from you, without adding risk to their overall licensing regime.
In light of knowing your options, especially when it comes to correspondent tie-ups here are a couple of options that you can consider.
Watch this video to learn about correspondent tie-ups and why they are important for payouts: What is a Correspondent Tie-up? & Why is it necessary?
All the scenarios are answered here, namely, using the service provider’s correspondent network, using your own (they must go through a qualification process), or using a tri-party correspondent tie-up.
You must already know, if you have a licensed partner on the ground in the payout country, you can use them, but they MUST have a corresponding tie-up agreement with the principal license holder in the US.
If you wish to use a single entity to then further send remittances to other countries, then this might be the best solution:
What is a Tri-Party Correspondent Tie-Up Agreement?
Tri-Party Correspondent Agreement has an additional referral fee of US$ 8,000 (one-time).
Under the present arrangement, any license coverage outside the United States is not offered. Those would be separate referral agreements and discussions.
Almost all our solution providers allow the use of a d/b/a, i.e. doing business as. You should be okay.
These are questions that can be directly answered by the solution provider that decides to work with you. As we work with many of them, we cannot unilaterally let you know that Solution Provider “A” will give you these terms and rates and Solution Provider “B” would give you these terms, etc.
This is why we get a referral agreement signed and then present you to the solution providers who have indicated they would like to work with you. Once you have been introduced directly, you can obtain the rates, terms, etc. for your payout countries directly from the solution provider themselves.
For origination of funds you will be using our solution provider.
For payout, you can use your payment rails, provided that they are through licensed entities.
Watch this video to learn more about payment rails.
[91] What is a Correspondent Tie up? & Why is it necessary?
You can use ours or, if you have a licensed partner on the ground, you can use them. But, they MUST have a corresponding tie-up agreement with the principal license holder in the US.
If you wish to use a single entity to then further send remittances to other countries, then this might be the best solution, we call this a tri-party correspondent agreement (which would have additional, one-time referral fees).
You can learn more about what a tri-party correspondent agreement is by watching the video below.
[97] What is a Tri-Party Correspondent Tie-Up Agreement
Tri-Party Correspondent Agreement has an additional referral fees.
This depends on your understanding and the bank’s understanding of what a meaningful relationship and client business is all about. Banks are in the game to make money. No amount of friendship and relationship building matters. It is all about KPIs in the end.
The minimum we see is US$ 1,250 per month and the mean (average) hovers from US$ 2,500 to US$ 3,500 and the highest we operate in (prices can go much higher, but we do not market them) is US$ 5,000 per month.
Various service providers differ in their solution. The providers that we work with, do charge on a per-transaction basis if you opt for only the software solution. However, in the case that you are their sponsored client for regulatory purposes, they will not impose a per-transaction fee.
Yes, you may. Depending on your case, there is always a requirement to list your MUST HAVE STATES in the Term Sheet Consideration (see below). You can opt to choose just those states and price for that. E-wallet services are priced 40% more than a standard coverage. So please remember to add that amount if you opt for e-wallet type services less than nationwide coverage.
The full pricing as mentioned can be seen at: https://faisalkhan.com/money-transfer-operator-license-coverage-consulting-fees/
Below you will find more information about an MSB, or Money Services Business and an FMSB, or Foreign Money Services Business.
Money Services Businesses (MSB)
An MSB is a business that:
- Offers one or more of these services to the public
- Has a place of business in Canada
You can learn more about MSBs or use this to complete the Pre-registration form.
Foreign Money Services Businesses (FMSB)
An FMSB is a business that:
- Offers one or more of these services to the public
- DOES NOT have a place of business in Canada
- Direct services at persons or entities in Canada.
- Provide these services to clients in Canada.
You can learn more about FMSBs or complete the Pre-registration form
We have a schedule that is followed. Since you are seeking an e-wallet arrangement, then the total is US$ 28,000 for nationwide coverage. You will pay as follows:
- One-time Application Fees: US$ 1,500 (at the time of signing this referral agreement)
- For Licensing Coverage: 25% of the agreed amount upon signing of the referral agreement: i.e. US$ 7,000.
- Another 25% of the agreed amount due upon due-diligence completion: i.e. US$ 7,000.
- Balance 50% of the agreed amount due at the time of signing the contract with Solution Provider: i.e. US$ 14,000.
There is a 1-year billing commitment which clients must abide by, after which you are free to cancel.
Unfortunately not. We receive hundreds of requests throughout the year and it becomes almost impossible to get on a call with each and every person who wants us to teach them on how the entire money transfer system works. If we were to do that, we would be out of business.
Not for the pre-built versions, but you can certainly build your own from scratch (using the APIs).
That is not relevant. If you opt for the sponsorship route, you will essentially need the following three tasks to be taken care of by you:
- 1st level of customer support
- Sales and Marketing of your brand/website
- Technical development using the API (if you opt for that route).
The provider will be hosting on your behalf using AWS (Amazon Web Services), and you will be billed as-per-actuals.
API look all depends on you. It is your front-end. On the prebuilt, we can show you screenshots and demo, but the actual demo will vary as per the solution provider you have chosen.
May we suggest the following on YouTube: https://www.youtube.com/results?search_query=Faisal+khan+nigeria+money+transfer
The relationship will be with a licensed financial institution. Not a brokerage account, etc.
If you use our API, there will be more design freedom. We’ll provide a standard app which will have its design limitations. Any additional feature development would require more time and cost.
For local transfers: you have next day ACH, same day ACH, and later on, RT Payments, and it is NOT called Real-time ACH.
For international transfers: as it will be pre-funded, it can be literally be instant, depending on the payout partner.
Most of the UI sections will have your branding. The ToS, user onboarding sections, payment authorization, and receipt will have the sponsor’s branding.
Yes, we will provide support during API integration via Call, Slack, and Email communication.
You can request additional features from the solution provider. A better alternative is to use their application as it is and then sometime in the future, release /switch over to your own application.
Yes, eventually you will have access to RT (Real-time) transfers without chargebacks or reversals. These are real-time, not same day ACH.
We can’t advise you there. We can only push what we market/sell. (Just being super candid here).
We cannot comment on the merchantability of your project nor its feasibility.
You can consult with these example spreadsheets to learn how to model your business:
- Revenue Modeling Google Sheet for Remittances – Simplex Version
- Revenue Modeling Google Sheet for Remittances – Complex Version
No. Our referral fees are plain and quite straightforward. The schedule of payment is as follows:
- One-time Application Fees: US$ 1,500 (at the time of signing this referral agreement)
- For Licensing Coverage: 25% of the agreed amount upon signing of the referral agreement: i.e. US$ 7,000.
- Another 25% of the agreed amount due upon due-diligence completion: i.e. US$ 7,000.
- Balance 50% of the agreed amount due at the time of signing the contract with Solution Provider: i.e. US$ 14,000.
The account will be able to accept any electronic (ACH &/or FedWire) and SWIFT deposit into the account. Direct cash deposits are NOT allowed.
If you have a pre-arrangement with an armored car service like Garda or Brinks and you can vault your cash there, then the account can very easily receive money via ACH or FedWire from these armored car services into your designated bank account.
The PLH (or Principal License Holder) does NOT hold back money unnecessarily. As soon as the money is available, the money is credited to the appropriate account.
You need to be 100% cognizant that, under a sponsorship agreement, your client will NOT touch customer funds. They can only touch their own commission money. Everything else is customer funds and are held in an FBO (for benefit of) account.
You’re not actually getting a money transmitter license, but rather an umbrella coverage for the license in the US with the solution providers we work with. These solution providers will essentially give you regulatory coverage (i.e. money transmitter license coverage) for the United States. Simply put, a white-label solution, or in alternative legal speak: You’re renting a license.
This process is true for all sorts of services we provide. Whether it is access to banking, payment processing, licensing in other territories, the process is the same: https://faisalkhan.com/money-transmitter-license-application-process/
Yes, usually the solution provider will be doing due diligence on you, and in that time-frame, you can pretty much start within a week of negotiating your contract with the solution providers.
We have seen requests such as: “Customers of our company, onboarded in the solutions provider legal entities, should not be reached for any other business/service/product related matter different than the one provided by our company, during the time of the agreement and at least 3 years after its dissolution or finalization. Customers should be contacted for any other service or product by our company only.”
Almost no solution provider will agree to this clause (at least the ones we work with). If they provide licensing coverage, technically and legally, the client belongs to them. Putting this clause is in contravention to the MTL requirements and obligations they have from their state, the federal authorities, and especially from BSA and CFPB angle.
The restrictions are provided to you by the MSB PLH themselves (Principal License Holder). Depending on who is going to take your case, the PLH will let you know of the prohibited products &/or services that you cannot engage in when you sign up with them. This is inclusive of zones and territories worldwide you cannot sign clients up from, depending on your flow of funds and licensing outside the United States (or lack thereof).
This depends on how ready YOU are.
With a NBFI (Non-Banking Financial Institution) the due diligence parts takes between 2-3 weeks, and contract negotiation and flow of funds, etc. can be done in parallel. It takes between 3-4 weeks to get an agreement signed.
With a banking financial institution, the numbers/timetable above are easily doubled.
To go live, depends on your technical prowess and readiness. Usually clients go-live in about 3-4 weeks after that with NBFIs and between 6-8 weeks with an FI.
Allow us to explain here (in brief):
- We don’t rent the license per se, we use that term so the client understands what is being offered.
- The PLH (Principal License Holder) sponsors the project of the client.
- The project has to be in the same vertical and business, in which the PLH is in. If the PLH is in the business of pizza, the client can be in pizza delivery, pizza boxes, etc. The client cannot sell stereos. That is literally tangential to the vertical the PLH is licensed for.
- The PLH is the Program Manager. They handle everything, including funds, processing, compliance, etc. Think of the PLH launching another project/product.
- We’ve been vetted, and given a clean bill of health by various regulators (think North Carolina, Illinois, Florida, Texas, California, and Washington state).
- We’ve used these past experiences to further better the model.
- The Client that is seeking to ‘rent’ the license essentially ONLY does 1st level of customer support, pre-funding, and sales/marketing.
- The signups, KYC, customer ownership, legal contract, etc. are all with the PLH.
- In certain cases, where the match is 100% between the PLH and the Client, the Client may opt to become an authorized agent/delegate of the PLH.
- We’ve worked with over 20+ PLH
- We also work with many banks, credit unions, community banks, and trusts to do the FBO arrangements as well.
You can get access to pretty much everywhere. Unless sanctioned or deemed high-risk by the sponsoring institution or solution provider.
Pretty much everywhere. Unless sanctioned or deemed high-risk by the sponsoring institution or solution provider.
No.
We are financial services brokers. We work with a wide variety of Solution Providers (S/P) otherwise known as PLH (Principal License Holders) who may be either a licensed banking financial institution (BFI) or a licensed non-banking financial institution (NBFI). We have a signed contractual relationship (i.e. legal permission) with the Solution Providers to market &/or solicit their products & services to customers from around the world.
In plain English, assume you have ‘outsourced’ all the aspects of the legal, compliance, technical, banking, payments processing, record keeping, reporting, money flow handling, monitoring, and transaction processing to a 3rd party. This 3rd party has the license.
They will do all this under YOUR BRAND NAME. Only thing is, that they need to legally mention somewhere on your website, that the services are being legally provided by them. Like “Powered by ABC License Holder”.
They will do all of the above without you touching the money, i.e. you are absolved of any legal responsibility, and the only thing you have to do is marketing, customer support, and put up the pre-funding money.
We charge a fee to broker a deal for you, i.e. we will be using the Regulatory Coverage Form submission you did, along with the Term Sheet Consideration Form that you submitted, and find you a willing licensed partner who would be able to provide you with these services, with a near match or exactly matching your expectations as requested in the term sheet.
You will liaise directly with the provider and be able to launch your service in one of three options:
- Use their tech stack (API) and build your app on top of it.
- Use their white-label solution (web &/or mobile, depending on the solution provider) and continue with that.
- Use their white-label solution (web &/or mobile, depending on the solution provider) till such time you have developed your own solution using their API.
The terms of our engagement are success-based, with a one-time non-refundable application fee. As time is a precious commodity, the only limitation that is placed here is that both ourselves and the solution providers EXPECT you to know the nomenclature and business vernacular of the industry. Neither of us will take time to explain concepts and terminologies to you. You are expected to be fully versed in that.
We have spent many hours putting out educational/information-filled videos on the subject matter. There are over 150+ videos that explain all these concepts on YouTube that you can possibly ask about this business.
The channel can be accessed here: Faisal Khan’s YouTube Channel: http://bit.ly/FKYoutubeChannel
In summary:
The licensing, and all allied aspects of the business are provided by the solution provider. You have to provide the 1st level of customer support for your brand, sales & marketing effort, and pre-funding money. Needless to say, whatever the solution provider will charge you for having such a joint-deal in place, you will pay a subscription for that based on your Term Sheet Consideration.
MSB provides you with the regulatory (money transmitter license) coverage that you need for taking custody of 3rd party funds.
When we take your application to various solution providers, they may or may not have nationwide coverage. In some instances they have coverage of all the major states, in some cases, the program manager may be managing multiple solution providers and may have 42 licenses, or 35 licenses or 10 licenses. It all depends.
The most important element is to understand what would be a deal-breaker for you, and hence to understand, what are the licenses you absolutely cannot do without. Hence these are your “must-have-states”.
As an example, you can say, “I don’t care if we get North Dakota or not, but the Florida license we 100% need”, or “It does not matter if Colorado is not available, but California we must have”.
So, this is what we mean by “must-have-states”. US States which must be included in the coverage without which you cannot continue.
This is what a solution provider can typically charge you:
https://faisalkhan.com/money-transmitter-license-coverage-financials/
However, as we do a reverse term sheet, this means, YOU define (realistically speaking) what you are willing to pay and then we go and try to find a provider if we can, who will accept and consider the term sheet you have offered them.
Here is a quick explainer video: What is a Term Sheet Consideration:
https://www.youtube.com/watch?v=XCvorH1Wsaw
As it has already been pointed out to you (in the proposals you may have received and various YouTube videos), there are many avenues of approach when it comes to getting a license for your money transfer business project.
You can:
- apply for your own new license
- you could buy a company that already has a license
- you could become a registered agent of a company that has a license,
- or you could let the company sponsor your project under their license.
The following four things need to be taken care of before we can start officially:
- The Remittance As A Service (or Regulatory Coverage) Form needs to be completed
- The TSC (Term Sheet Consideration) has been submitted
- The Referral Agreement has been signed, and
- The payments (application fees and the 25% advance) has been paid
Once the payments have been confirmed, work starts immediately. i.e. within the next three business days you would be introduced to potential sponsoring solution providers.
The Forex rate is set by you or rather the payout partner. The Principal License Holder has no role to play in the forex, as the deal is USD to USD to them unless of course, they are handling the payout portion in the beneficiary country on your behalf.
- Fill out the Remittance As A Service / Regulatory Coverage form
- Fill out the Term Sheet Consideration form
- Sign the referral agreement, and
- Pay the application fee (US$ 1,500, one-time, non-refundable) and the advance 25% (refundable) deposit.
There is no fee based on a per State basis. It is based on the quantity and the importance of the states (example: NY, TX or CA).
However, we use the following slab rate for the referral fee:
- Less than 5 states and NOT including TX, CA or NY, the one-time referral fee that we charge is USD 10,000
- Less than 5 states and including ONE of the following three states: TX, CA or NY, the one-time referral fee will be USD 12,500
- Less than 10 states and including ONE or more of the following three states: TX, CA or NY, the one-time referral fee will be USD 18,000
- Nationwide Coverage (or more than 10 states and the big three, TX, CA and NY) agent status, the one-time referral fee will be USD 20,000
All of the above carry a one-time, non-refundable application fee of US$ 1,500.
The details can be seen at: https://faisalkhan.com/money-transfer-operator-license-coverage-consulting-fees/
It all depends on volume, limits, vertical, ID being provided for, number of daily transactions, average transaction value.
It takes about 6-8 days. Then, signing the contracts etc. is usually done in about 1-2 weeks.
Yes. We do however need you to fill out the form below for a true assessment.
Please go to this link and fill out this form: https://faisalkhan.com/licensing-regulatory-coverage-questionnaire/
You will pay as follows:
- One-time Application Fees: US$ 1,500 (at the time of signing this referral agreement)
- For Licensing Coverage: 25% of the agreed amount upon signing of the referral agreement: i.e. US$ 7,000.
- Another 25% of the agreed amount due upon due-diligence completion: i.e. US$ 7,000.
- Balance 50% of the agreed amount due at the time of signing the contract with Solution Provider: i.e. US$ 14,000
See our answer [Is there any monthly fee if I avail Remittance As A Service?] and the suggested fee on this page.
Remember these are suggested fees, just to give you some form of semblance (approximations)
The Solution provider does charge a monthly fee. Depending on the solution provider, this can vary from something as low as US$ 1,500 per month to something as high as US$ 5,500 per month.
Certainly. You have the following four options:
- Less than 5 states and NOT including TX, CA, or NY, the one-time referral fee that we charge is USD 10,000
- Less than 5 states and including ONE of the following three states: TX, CA or NY, the one-time referral fee will be USD 12,500
- Less than 10 states and including ONE or more of the following three states: TX, CA or NY, the one-time referral fee will be USD 18,000
- Nationwide Coverage (or more than 10 states and the big three, TX, CA, and NY) agent status, the one-time referral fee will be USD 20,000
All of the above carry a one-time, non-refundable application fees of US$ 1,500.
The US$ 25,000 you paid to the other solution provider has nothing to do with our fees. So the two are mutually exclusive.
The only way it is really useful is when showing that you hold it in your hand and take a selfie with it, along with the identification document and the cash receipt you have.
It varies. It will depend on Visa cards, it will depend on volume, and for other store gift cards it will depend on what merchant it is.
Yes. Provided your financials are near market numbers and not ridiculous or unrealistically out of line, they would be met by the service providers.
You can get in touch with our team and we can discuss withdrawals greater than $1000. Depending on the volume and other factors, it could also be higher.
If you find a sponsor, for VISA/Mastercard, yes, but we would need to see the flow of funds. When you say, integrate – integrate how? Are you acquiring customers using the VISA/Mastercard platform or are you issuing cards?
The answer is generally yes.
We can know if the requested amount has been successfully transferred or not, but we cannot check balances.
The best way to do that is to make sure you have filled out the requisite forms and have been provided with a quote. The quote document is derived from the fee structure pages and contains all the relevant charges that are applicable to your project (as per our understanding). This would also include our referral fee.
Unfortunately, we are inflexible on both. We’re sorry. As much as we like your vibe, mission and what you are trying to do, the price cannot be lowered or delayed.
End-to-End: 3 weeks (minimum), 5 weeks (average). Assuming your compliance program and manual is approved.
This depends on how ready YOU are. The due diligence parts takes between 2-3 weeks, and contract negotiation and flow of funds, etc. can be done in parallel. It takes between 3-4 weeks to get an agreement signed. To go live, depends on your technical prowess and readiness. Usually clients go-live in about 3-4 weeks after that.
They will credit all the money.
There is an additional requirement to place funds in reserve. These are separate from the pre-funding that you may do. These funds are held in reserve to pay out against any chargeback &/or fraud that may occur, as the PLH would have to draw down on this amount from the reserve pool and then investigate the transaction.
The principal license holder and their respective partners, do not hold on to customer funds (for purposes of reserve, etc.)
Once the money transfer is successfully received, an introduction to the solution provider is made immediately. It is then up to you, how long you take to draw up an agreement with the solution provider, which typically takes between 2-3 weeks
Once the TSC (Term Sheet Consideration) has been submitted, the Referral Agreement has been signed and the payments (application fees and the 25% advance has been paid), work starts immediately. i.e. within the next three business days you would be introduced to potential sponsoring solution providers.
There is no fees based on a per state basis. It is based on the quantity and the importance of the states (example: NY, TX or CA).
The details can be seen at: https://faisalkhan.com/money-transfer-operator-license-coverage-consulting-fees/
We can provide your company regulatory coverage through our license holders in Canada. In essence, you will be “sponsored” under their license.
Our referral fee is US$ 15,000 with a one-time (non-refundable) application fee of US$ 1,500. In addition to that, you will also have to pay the solution provider. Those terms are to be decided by you and the Solution provider. For that you need to fill out a term sheet.
The term sheet can be accessed here : https://faisalkhan.com/term-sheet-consideration/
The full spectrum of our rates can be found at https://faisalkhan.com/fees and also below in the Quote section of the proposal.
There are TWO types of Fee:
(i) Fee paid to our company (Faisal Khan & Co. ) as referral fees, which is listed in this page: https://faisalkhan.com/money-transfer-operator-license-coverage-consulting-fees/
(ii) Fees (suggested) paid to the Solution Provider / Principal License Holder can be seen at: https://faisalkhan.com/money-transmitter-license-coverage-financials/
How “we” charge can be read at: https://faisalkhan.com/how-do-we-charge-our-fees-for-commercial-services/
From our company (Faisal Khan & Co.) no. Nothing.
Once the referral fee is paid, there is nothing more you owe us. The Solution Provider (depending on which one decides to take your case) can charge yearly fees, but most of them do not.
None. You are to present your case as is. The partner (aka, the solution provider, aka, the PLH) has its own mechanism of qualifying you and assessing your project. We do not ‘position’ you in any manner. That should also be your stance.
The ONLY refundable amount (within 30 days) is the 25% that you pay upon signing of the referral agreement with us. If you pay the second tranche after due diligence is completed and then opt NOT to continue with the solution provider for reasons on your own, then the amount is NOT refundable. If you have paid the second tranche and the solution provider confirms to us that they cannot onboard you for reasons related to the results of your due diligence, then the second tranche (only) is refunded in full.
In the case of not continuing forward with the solution provider (as you have been introduced to the solution provider by us), if you sign up with them over the course of the next 18 months, then the referral fees in full are due to us.
YES. We do however need you to fill out the form below for a true assessment.
Please go to this link and fill out this form: https://faisalkhan.com/licensing-regulatory-coverage-questionnaire/
The solution provider will provide you with APIs. Period. That’s it.
It is assumed you have the necessary back-end and the technical staff to take the API and develop on top of it.
This is a question we get a LOT. So allow us to explain why we would politely decline your request.
- Confidentiality: Almost all our (past and present) clients, and in the future, you included (if you were to sign-up), would require that we maintain confidentiality about your business. With that said, we neither disclose the names of the clients nor the associations. As we do not sign Non-Disclosure Agreements, protecting this information then becomes further burdensome.
- Brokering/Referral Perspective: The whole engagement process (with us) is based on finding a right-fit partner for you. It would defeat the purpose if we prematurely disclose the name of the providers, and the whole essence of our referral agreement hinges on that disclosure, for which we charge for.
- Monetary Risk: Your commercial ‘risk’ is the application fees (one-time, non-refundable) of US$ 1,500. The advance you pay as per the milestones are refundable if you do not engage/proceed beyond the due-diligence stage.
- Direct Negotiation: As you will be directly introduced to the solution provider(s), your assessment on the competence factor, past-cases, present clients, etc. can all be addressed then, when you communicate directly with the Solution Provider. The goal here is that if you sign-off on the Term Sheet Consideration (TSC) and we find you a provider that matches or beats the financials mentioned in the TSC, then your chances of signing up with the provider are very high (given the problem and predicament in mind, with which you contacted in the first place).
- Competence and Domain Knowledge: In the unlikely event, if you doubt the competence, domain knowledge, network or genuineness of our company, you are free to do your background check and homework on us. We put strong emphasis in ensuring our blip on the social radar is loud and meaningful. This includes our network on LinkedIn, domain knowledge and the sheer amount of information we have published. Couple this with our interaction in a Q&A format, for the business you wish to be in, an expert can very quickly and easily discern the difference between someone competent & genuine to one who is incompetent and has a nefarious intent. Furthermore, you can also very easily do a negative statement search result on our name in Google or other leading platforms.
We hope this provides you with the necessary calm and assurance of why we cannot entertain your request.
No. As our customer, you have to have an approved bank on file with us, you can only send to your bank account in your name.
We are in the business of brokering. There are PLENTY of videos on our website and on our YouTube channel, that explain the processes. Specifically, this video:
[147] 7 Steps to Starting a Cross Border Payments Company
Our goal is to find you a sponsored license.
In plain English, assume you have ‘outsourced’ all the aspects of the legal, compliance, technical, banking, payments processing, record keeping, reporting, money flow handling, monitoring, and transaction processing to a 3rd party. This 3rd party has a license.
They will do all this under YOUR BRAND NAME. Only thing is, that they need to legally mention somewhere on your website, that the services are being legally provided by them. Like “Powered by ABC License Holder”.
They will do all of the above without you touching the money, i.e. you are absolved of any legal responsibility, and the only thing you have to do is to marketing, customer support, and put up the pre-funding money.
We charge a fee to broker a deal for you, i.e. we will be using the Regulatory Coverage Form submission you submitted, along with the Term Sheet Consider Form that you submitted and find you a willing licensed partner who would be able to provide you with these services, with a near match or exactly matching your expectations as requested in the term sheet.
You will liaise directly with the provider and be able to launch your service in one of three options:
- Use their tech stack (API) and build your app on top of it.
- Use their white-label solution (web &/or mobile, depending on the solution provider) and continue with that.
- Use their white-label solution (web &/or mobile, depending on the solution provider) till such time you have developed your own solution using their API.
The terms of our engagement are success-based, with a one-time non-refundable application fee. As time is a precious commodity, the only limitation that is placed here is that both ourselves and the solution providers EXPECT you to know the nomenclature and business vernacular of the industry. Neither of us will take time to explain concepts and terminologies to you. You are expected to be fully versed in that.
We have spent many hours putting out educational/information-filled videos on the subject matter. There are over 150+ videos that explain all these concepts on YouTube that you can possibly ask about this business. The channel can be accessed here: Faisal Khan’s YouTube Channel: http://bit.ly/FKYoutubeChannel
In summary:
The licensing, and all allied aspects of the business are provided by the solution provider. You have to provide the 1st level of customer support for your brand, sales & marketing effort, and pre-funding money. Needless to say, whatever the solution provider will charge you for having such a joint-deal in place, you will pay a subscription for that based on your Term Sheet Consideration.
The restrictions are provided to you by the MSB PLH themselves (Principal License Holder). Depending on who is going to take your case, the PLH will let you know of the prohibited products &/or services that you cannot engage in when you sign up with them. This is inclusive of zones and territories worldwide where you cannot sign clients up from, depending on your flow of funds and licensing outside the United States (or lack thereof).
Based on your application submission, here are the financials. This is what our company would charge you for consulting/facilitation:
Option (A). United States (Multiple state licensing, including NY), White-Label for purposes of domestic and international money transmission.
Cost: US$ 12,500 (non-wallet)
Term: One-time
Application Fee: (non-refundable): US $1,500
Payment Schedule: 25% upon signing of the referral agreement, 25% upon completion of due diligence and balance, 50% upon signing of a contract with the solution provider.
Pre-requisites: Term Sheet Consideration must be signed-off.
Reference:https://faisalkhan.com/money-transfer-operator-license-coverage-consulting-fees/
Comment: This comes without a bank account. You will have to arrange a bank account for your commissions, etc.
Option (B). United States (Multiple state licensing, including NY), White-Label for purposes of domestic and international money transmission.
Cost: US $18,000 (comes with an e-wallet)
Term: One-time
Application Fee: (non-refundable): US $1,500 Payment Schedule: 25% upon signing of the referral agreement, 25% upon completion of due diligence and balance 50% upon signing of a contract with the solution provider.
Pre-requisite: Term Sheet Consideration must be signed-off.
Reference:https://faisalkhan.com/money-transfer-operator-license-coverage-consulting-fees/
Comment: This comes without a bank account. You will have to arrange a bank account for your commissions, etc.
Option (C). MSB Friendly Bank (Access to Banking) — this is optional
Cost: US$ 12,500
Term: One-time
Payment Schedule: 25% upon signing of the referral agreement, 25% upon completion of due diligence and balance 50% upon signing of a contract with the solution provider.
Pre-requisite: Term Sheet Consideration must be signed-off.
Reference:https://faisalkhan.com/money-transfer-operator-license-coverage-consulting-fees/
Comment: Depending on how it is structured, this might be an FDIC insured or NON-FDIC insured bank account.
The Term Sheet Consideration can be accessed here:
https://faisalkhan.com/term-sheet-consideration/
This is why we charge a premium. We have been in this business for over 10 years now. Our approach, strategy, and delivery process did not come out straight from day one. Believe us when we say the journey has been painful.
Over the years, we've exacted what needs to be presented, how it needs to be presented so that banks and non-banking financial institutions become our preferred solution partners. In plain English, they KNOW the type of customers we want to bring and we service them specifically for the kind of markets and verticals you are looking at.
One business day.
Friday processing after 3 PM will be credited on the next working day.
No. Unfortunately, that is not permitted. You need to fill out the term sheet with valid numbers. A term sheet cannot be set up as “TBD” (To Be Determined) / “TBA” (To Be Announced).
Please kindly fill it out with actual numbers so that the solution providers can indeed review your request and comment back on your offer for them to consider.
Also, please provide the following along with your term sheet submission:
(i) MUST HAVE US States (assuming you cannot get nationwide coverage)
(ii) MUST HAVE Payout Countries to start with.
No. Crypto is not included in any default solution at the moment, unless otherwise explicitly specified or mentioned.
Yes, we have successfully onboarded clients in 2020 that are classified as MSBs, and they STILL are onboarded and banked. Same with the ones from 2019.
It depends on which solution provider you have signed up with and how long they take to process and credit into your collection account.
Yes. An API will be provided for. It also depends if you get an FI or an NBFI (Financial Institution, i.e. a bank or a non-banking financial institution – i.e. a non-bank).
Ideally, money needs to flow from end to end through a licensed entity, and through accounts in the name of these licensed entities.
The engagement process starts with the signing of a referral agreement. We require clients to sign a referral agreement, provide background KYC information, agree to the assessment fees, and provide a refundable amount.
If you would like to proceed ahead, please provide the following:
Name of Legal Entity:
Address:
City:
State/Province:
ZIP/Postal Code:
Country:
Contact Person Name (Full):
Designation:
Email:
Telephone:
As soon as we have this information, we will forward you a correctly formatted standard referral agreement. Which after signing and the deposit, we will do an email/telephone introduction to the solution provider. You will most likely sign a non-disclosure agreement with them and then, as always, we suggest the following five activities run in parallel:
- Application/Due Diligence
- Contract Draft (so respective legal counsels can go over it)
- API/Technology (so that the technical staff can quickly bring themselves up to speed as to what they need to do to connect and make it happen)
- Commercials (i.e. the Term Sheet)
- The Flow of Funds (anticipated method of how you think the transactions would be occurring. This may be right or wrong, but it provides a starting point for the solution provider to work with and comment upon).
Yes. It does. However, it is recommended to do ID verification for higher limits. Lower limits do not require a photo ID verification. Mileage will vary as per the solution provider.
KYC is the responsibility of the Principal License Holder, and an API will be provided to you by the sponsoring institution as it is their responsibility to do KYC directly. As and when you get your licenses, you should have an agreement in place with the sponsoring institution beforehand, that allows you to do the following:
- Be able to have access to client/customer information for the states in which you get licenses, as and when you get them. Only non confidential data will be provided (i.e. address, DOB, and SSN are NOT provided for).
- Be able to get the historic transaction logs.
- Be able to get the ledger balances.
- Be able to get any other information that both providers can mutually agree on, for the purpose of a smooth transition, without breaking any state &/or federal privacy laws.
Under a sponsorship model, you do not need a compliance officer (either part-time or full-time), as you are not taking custody of funds. The funds are essentially being ‘handled’ for you, on your behalf as per the agreed terms. So, strictly speaking, a compliance officer is NOT needed.
Whilst it certainly helps to have one (going forward when you expand your business and get your own licenses), to start out, you do not need one, as the onus of the transactions is not on you.
Yes. The business of moving money is a regulated business. This means, that you would require a license that would be issued from the local financial regulator in your country (from where the transaction is originating) and also require a license in the country in which the transaction is being terminated.
Banking institutions that do money transfers for themselves, do not require a money transfer license, as their banking charter covers this already.
However, as a NBFI, i.e. a non-banking financial institution, you would need a license, as issued by your financial regulator.
Let me stress, the movement of money as an intermediary requires a license. I am not a lawyer, but please consult with your respective financial regulator and find out from them.
Yes, if you incorporate you can get a USD account, you can also get a CAD account. But you cannot sign up customers. The account will be used for transactions happening outside Canada and the USA. You cannot sign up a Canadian or US customer.
Answer: If you have a Canadian account in the US, then you can pick up a Canadian customer if you are licensed with FINTRAC.
If you have an AUD account in the EU, then you can pick up an Australian customer if you have an AUSTRAC license.