Opening a Bank Account for a U.S. MSB

If you are a Money Services Business (MSB) operating in the United States, opening and maintaining a reliable bank account is a critical step in your operational journey.

Why an Operational Bank Account Matters for a U.S. MSB

An operational account helps your business separate its internal funds from client funds and supports your core activities like payroll, office costs, utilities, or vendor payments.

For your MSB, you'll typically need two separate account types:

• Operational account: Handles the company’s internal expenses and working capital—not customer funds.

• Client funds / transaction account: Used to receive, hold, and pay out customer funds or agent flows. Client fund accounts are usully multi-currency master accounts that can create sub-accounts for underlying ccustomers.

Having the right account types ensures your operations are legally sound and reduces the risk of bank regression or regulatory issues.

Operational Account vs Client Funds Account

For a U.S. Money Services Business (MSB), banks and regulators typically require the clear separation of funds through two distinct account types — the operational account and the client funds (or transaction) account — each serving a specific function within your financial ecosystem.

The operational account is designed solely for the MSB’s own business activities. This account manages the company’s internal financial operations — such as payroll, rent, utility bills, technology vendor payments, marketing expenses, and other overhead costs. It represents the working capital of the MSB itself, not its customers. By keeping operational funds separate, the business demonstrates fiscal discipline, transparency, and compliance with regulatory expectations that prohibit the commingling of company and client money. Banks and auditors will often review this segregation to ensure that customer deposits remain protected even if the MSB experiences liquidity challenges or business interruptions.

In contrast, the client funds or transaction account serves as the central platform for managing customer money. It’s the account through which the MSB receives deposits from clients, processes payments, and remits or disburses funds to beneficiaries, agents, or counterparties. These accounts are typically multi-currency master accounts capable of generating individual sub-accounts for underlying customers, agents, or corporate clients. This structure allows the MSB to maintain precise transaction tracking, reconcile individual client balances in real time, and comply with safeguarding requirements that protect customer funds. Many advanced payment platforms use virtual IBANs or sub-ledgers tied to the main client funds account, providing a transparent audit trail and ensuring each client’s funds remain legally and operationally distinct.

Maintaining strict separation between the operational and client funds accounts is not merely a best practice — it’s a regulatory expectation under anti-money-laundering (AML) and consumer protection frameworks. Properly structured, these accounts demonstrate strong governance, protect the business against regulatory penalties, and build confidence with banking partners, auditors, and customers alike.

Ensure Your MSB Licensing and Regulatory Compliance Are in Order

Before talking to banks, make sure your business is regulator-ready:

• Register with Financial Crimes Enforcement Network (FinCEN) as an MSB. Every U.S. money transmitter must file this registration.

• Clarify your business model: Are you performing money transmission, currency exchange, check‐cashing, prepaid access, or agent services? Banks will want clear definitions.

• Create a comprehensive AML/CTF programme: written policies, transaction monitoring, compliance officer, training, audit schedule.

• If applicable, obtain state licences in the U.S. (many states require licensure for transmitters).

• Draft your business plan, showing projected volumes, payment corridors, funding sources, customer types, and risk mitigants. The bank will examine these in detail.

Choose the Right Bank and Get Your Documents Ready

MSBs are high-risk clients from a bank’s perspective, so approach the process with full preparation:

• Target banks known to work with MSBs or payment service firms—many banks are cautious about MSB relationships. If you would like to get an up to date list of banks that can work with MSBs, fill out our contact form and we will send it to you by email.

• Prepare a bank account opening package with:

  • Certificate of incorporation, federal EIN, state registration

  • Corporate governance documents (articles, bylaws, ownership structure)

  • Directors, beneficial owners, authorising signatories—IDs and verification for each

  • MSB registration certificate, state licences, compliance programme documents

  • Business plan, expected transaction volumes, payment types, inbound/outbound corridors

• Be transparent about your funding flows, customer origination, agent relationships and liquidity structure. Hidden or unclear elements often trigger rejection.

• Anticipate enhanced due-diligence: longer onboarding timelines, higher fees, minimum balances, or reporting requirements.

Address the Bank’s Key Concerns

Banks will focus heavily on these areas:

• AML/CTF Risk: Demonstrate your monitoring tools, alerts for suspicious activity, internal audit and independent review.

• Clarity of Funds Flow: Show how money moves—from payer to your MSB to customer or beneficiary. Flow diagrams help.

• Cash Intensity and Volatility: If your MSB deals heavily in cash, high-volume transfers or volatile flows, explain your controls and mitigation.

• Agent and affiliate oversight: If you use sub-agents, ensure you have formal agreements, monitoring and reporting of volumes.

• Bank relationship management: Treat the bank as a strategic partner—regular updates, compliance communication, transparency.

Maintain Your Banking Relationship and Stay Compliant

Opening the account isn’t the end—it’s ongoing work:

• Provide regular updates to your banking partner: monthly/quarterly transaction reports, changes to business model, new corridors.

• Conduct internal audits of your compliance programme and share findings if requested.

• Stay alert to changing bank risk appetites; banks may exit MSB relationships when regulatory pressure increases—have backup banking options.

• Communicate proactively: any significant business change or growth in transaction volumes → notify your bank.

Common Mistakes and How to Avoid Them

• Incomplete or generic AML/CTF policies: Banks expect policies tailored to your MSB model—not off-the-shelf templates.

• Vague business plans or unclear payment flows: If the bank cannot understand how money moves through your business, they will likely decline.

• Using un-registered agents or opaque structures: Banks see this as high risk—keep your agent network transparent and documented.

• Not planning ahead for de-risking: Many MSBs find their accounts closed without notice—set up multiple banking relationships early.

• Assuming your MSB registration alone is sufficient: While registration is mandatory, banks will still evaluate your risk, governance, transparency.

Conclusion

If you’re a U.S.-based MSB or ready to expand your operations, securing reliable banking access is your foundational step. Review your compliance programme, prepare your onboarding documents, identify banks experienced with MSBs, and sketch a backup plan for banking relationships.