An issuer, seller or redeemer of stored value may be a money services business subject to compliance with the Bank Secrecy Act. Such entities may also require licensing from their state and need to comply with various requirements dealing with their registration or licensing, documentation and record retention, bonding, requirements and restrictions on investment of funds pending disbursement, escheatment, et cetera.
An issuer is a business ultimately responsible for payment of stored value. An issuer of stored value in an amount greater than $1,000 to any one person on any day in one or more transactions is an MSB subject to the Bank Secrecy Act.
Seller or Redeemer
A seller is a business that sells stored value to others. Such an entity may also be the issuer or it may be an agent of the issuer.
A redeemer is a business that accepts instruments in exchange for currency or other instruments for which it is not the issuer. For example, a hotel that provides a customer with $1,500 in cash in exchange for the customer’s $1,500 in stored value (issued by another MSB) is a redeemer. Note however that a business that accepts stored value in exchange for goods or general services is not acting as a redeemer under the Bank Secrecy Act.
A seller or redeemer of stored value who sells or redeems such instruments in an amount greater than $1,000 in currency or monetary or other instruments to any person on any day in one or more transactions is an MSB subject to the Bank Secrecy Act.