Money Transmitter License (MTL)
A Money Transmitter License (MTL) is a state-level license required for businesses that transmit money on behalf of others, required in most US states for non-bank entities that move money between parties.
MTLs are required by most US states for businesses that transfer funds between parties — including payment apps, remittance companies, and certain fintech business models. There is no single federal MTL; each state has its own requirements, though many follow model legislation.
Getting licensed: a full US MTL stack requires licenses in 49 states (Montana is the only state without a traditional MTL requirement) plus DC. The process takes 12–24 months and requires net worth, surety bonds, background checks, and compliance program documentation.
Alternatives to MTL: operating under a sponsor bank's charter avoids the need for state MTLs in most cases. The bank's federal or state charter provides the regulatory coverage, and the platform operates as the bank's program rather than as an independent money transmitter.
MTL vs. sponsor bank: MTL gives you maximum independence and product flexibility but requires significant compliance infrastructure and time to obtain. Sponsor bank models are faster and share compliance responsibility but limit product flexibility to what the bank will support.