Money transmitter licenses (MTLs) are a valuable asset. For some companies—money movers like payment companies and digital wallets-–they are mission critical. In others, they enable new products and, therefore, new revenue streams.
However, MTLs are a financial investment, and product teams have to weigh the ROI of pursuing them. Product leaders often come to Brico to discuss the pros and cons, and what this commitment looks like in the medium to long term. The purpose of this article is to follow up to our first post, How Much Do MTL’s Cost? (which discusses MTL applications) with a clear breakdown of how much MTL maintenance costs in year 2 and beyond.
What Goes Into MTL Maintenance Costs?
- State Fees: Each state charges for MTL maintenance as they see fit. These charges fall into two categories: license renewal fees, and assessments. Renewal fees are pretty self-explanatory, and are due every year. Assessments are calculated differently from state to state - - sometimes they are based on transaction volume, and sometimes all MTL holders in a certain state are charged a fixed fee, almost like a property tax. We provide sample amounts in the table below.
- Surety Bonds: Surety bond costs are either equal to or more than the year 1 costs, depending on your transaction volume and if your company’s risk profile has changed. Companies are often surprised to find out that the ceiling for these fees can go up to $800,000 (all 50 states and DC) if average daily transaction volume runs in the millions of dollars in each state. It’s a champagne problem, to be sure, but one you should be aware of.
- Registered Agents + Secretary of State Fees: These fees are generally more consistent, usually around $200-$400 per state, covering the cost of having a registered agent and filing with the Secretary of State.
TLDR, the total cost?
- State Fees: ~$92,000
- Surety Bonds: ~$130,000 (and up, depending on transaction volume)
- Registered Agents + Secretary of State Fees: ~$19,000
Breaking Down the Costs By Each State
Here’s a table of all 50 states broken down by the major cost category. Please note that surety bonds are an estimated amount and can range between 1-3% of the total bond amount (and will continue to increase as your transaction volume increases).
