Massachusetts Revamps Money Transmission Law

In the past, only businesses sending money abroad required a license. However, with the introduction of the new Money Transmission Act (Massachusetts MTA) (H4840), the requirements now include any business selling or issuing payment instruments or stored value, as well as those receiving money for transmission from anyone located in Massachusetts. Soon, these businesses will need to get a license from the Massachusetts Division of Banks and will be supervised by it.

The Massachusetts MTA has significantly updated by repealing Chapter 169 of the Massachusetts General Laws, which previously focused on regulating money transmission to foreign nations.

The Massachusetts MTA will no longer allow any entity to engage in or advertise money transmission services in Massachusetts without obtaining a license. This change applies to various services, including peer-to-peer payment apps, stored value cards, and checks, ensuring a safer and more regulated environment for everyone involved.

The Massachusetts MTA is closely modeled on the Model Money Transmission Modernization Act (Model Act). It purports to provide consumer protection concerning, among other things, refunds, provision of receipts, and restrictions on the investment of user funds. However, the Massachusetts MTA does not adopt the Model Act’s provisions regarding virtual currency.

The Massachusetts MTA is due to take effect in September 2025.