License & Permit
Money Transmitter Bond
A license bond a state requires before a business can send money, sell money orders, or hold stored value for customers.
- Required by
- State banking or securities regulators (in Alabama, the Alabama Securities Commission)
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond protects customers if the licensee fails to deliver money it received for transmission or fails to honor payment instruments it sold. In Alabama, it secures the licensee's faithful performance of its money transmission obligations. Customers and the state can claim against it, and in Alabama it must cover claims for at least 5 years after the licensee stops doing business.
Who needs it
- Money transmitters and remittance companies
- Sellers of money orders and prepaid access
- Payment apps and fintech companies holding customer funds
What the underwriter looks at
- Transmission volume in the state
- Net worth and audited financial statements
- Ownership and compliance history
- Collateral
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How much is the bond in Alabama?
At least $100,000, or more based on average daily outstanding obligations in Alabama. The Commission can raise it up to $5,000,000 if the licensee's finances warrant.
Can I use something other than a bond?
Alabama allows a letter of credit or other security the Commission accepts.
Do I need a bond in every state?
Usually, yes. Each state that licenses you sets its own bond, though some states have adopted a common model law.