Money services businesses (MSB)

Examples include money transmitters like Western Union, digital wallets like PayPal, cryptocurrency exchanges, prepaid card providers, and check cashing services. In the U.S., any business that conducts more than $1,000 in relevant transactions per person per day may fall under the MSB definition and must comply with reporting and monitoring requirements.

MSBs are attractive to criminals because they allow rapid, cross-border movement of money, often with limited friction. Their decentralized and high-volume nature makes it harder to trace transactions or detect suspicious patterns without sophisticated AML systems. As a result, regulators treat MSBs as high-risk entities that must follow enhanced due diligence practices.

MSBs face challenges in building compliance infrastructure, especially when operating in multiple jurisdictions with varying requirements. They also struggle with account de-risking from partner banks that may be wary of indirect exposure. Implementing effective transaction monitoring and reporting systems is costly and complex, particularly for startups in fintech or crypto.