Prepare by mapping what your product actually does, where it operates, who receives or controls funds, and whether your company builds, supplies, or merely deploys AI. Those facts—not a “software,” “agent,” or “partner-powered” label—shape the regulatory questions. This guide focuses on US payments and remittances and the EU AI Act; it is a practical readiness framework, not a universal licensing checklist or legal opinion.
Do I need a money transmitter license?
You cannot answer that from the product name or a bank partnership alone. Start with the actual funds flow and the legal entities and roles involved. Receiving, holding, exchanging, or transmitting value may raise different questions from providing a software or payment-initiation layer, but labels do not settle the analysis. Principal-versus-agent arrangements and the details of the service matter.
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In the United States, analyze federal money-services-business (MSB) questions and state licensing questions separately. FinCEN registration, where required, does not establish that the company is cleared to operate in every state. The 2005 interagency guidance from FinCEN and the federal banking agencies calls registration, if required, and compliance with state-based licensing requirements the “most basic” MSB obligations, and notes that state requirements vary. The guidance is useful background, not a substitute for checking current statutes, regulations, state authorities, and later guidance.
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Map the service before classifying it
- List each product and customer type, including whether the service is consumer-facing or business-to-business infrastructure.
- Trace each payment from initiation to settlement: identify who receives, holds, exchanges, controls, or transmits funds, and when control changes.
- Record the sending and receiving jurisdictions, currencies, settlement partners, agents, and the entity responsible at each step.
- Separate what the company itself does from what a bank, licensed partner, agent, or other provider does. Have qualified counsel analyze the real arrangement rather than relying on contract labels alone.
Compare operating models by the questions they raise
| Operating distinction | What to investigate |
|---|---|
| Company receives or controls funds | Which entity performs the activity, in which jurisdictions, and what registration or licensing analysis applies? |
| Principal or agent arrangement | Who is acting for whom, what activity does each party perform, and what evidence supports the claimed role? |
| Direct licensing or regulated-partner model | What does counsel conclude about the startup’s own activities and obligations? A partner structure does not, by itself, establish that no license is required. |
| Consumer remittance service or B2B infrastructure | Does the product involve a covered consumer remittance transfer, or provide a service to another business? Assess the actual service and customer journey. |
| AI model provider or downstream system provider/deployer | Does the company place a general-purpose AI (GPAI) model on the EU market under its own name, significantly modify a model, integrate a third-party model into a system, or deploy AI? The role affects which AI Act duties to investigate. |
Does my remittance app have to give fee and exchange-rate disclosures?
If the product offers a covered US remittance transfer, Regulation E has a dedicated framework. The CFPB’s remittance-transfer materials cover definitions, disclosures and estimates, error resolution, cancellations and refunds, agent acts, and scheduled transfers. Which provisions apply—and whether a transfer is covered or an exception applies—depends on the facts of the transfer and current rule text.
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Build the analysis into both the customer interface and the operating process. Identify when required information must be presented, how estimates are handled, how customers can report errors, and how cancellation or refund requests are routed. Review agent conduct as part of the customer journey where agents are involved. Use the current regulation, official interpretations, and CFPB compliance materials rather than treating an old summary as current authority.
The CFPB says it withdrew Bulletin 2012-08 on May 12, 2025. Do not rely on that bulletin as current guidance; consult the current rule and materials for the question at hand.
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What should we prepare for BSA/AML and bank diligence?
Make your compliance program operational for the activities and risks you have identified. Assign accountable owners and maintain an evidence trail for the decisions, controls, and reviews. A prospective bank may ask about your products, customer segments, geographies, registration or licensing position, agent status, and Bank Secrecy Act/anti-money-laundering (BSA/AML) risk management.
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- Document the AML risk assessment, its owner, and how it is reviewed as products, corridors, customers, or partners change.
- Define customer identification and due-diligence processes appropriate to the service and applicable requirements.
- Set out transaction-monitoring and escalation processes, including who investigates alerts and how decisions are recorded.
- Assign responsibility for applicable recordkeeping and reporting, agent oversight, and periodic control reviews.
- Keep the supporting evidence current: entity and funds-flow maps, registrations or licenses where applicable, agent or partner documentation, policies, control records, and issue-resolution records.
The 2005 interagency guidance describes bank-side expectations for MSB relationships, but it is not a substitute for checking current laws and later guidance. It also says banks are not expected to act as de facto regulators of their MSB customers. A bank account or partner relationship therefore does not replace the startup’s own analysis and controls.
Make a bank diligence packet easy to review
Prepare a concise, maintained set of materials that explains the business as it operates—not just as it is marketed. Include a product and funds-flow overview, entity and jurisdiction map, customer and corridor profile, licensing or registration analysis, AML program overview, partner and agent roles, and the evidence supporting key decisions. Label open questions and identify an owner and next review date rather than presenting an unresolved assumption as a settled conclusion.
If we use an AI model in payments, who is responsible under the AI Act?
Responsibility depends partly on the company’s role. Using an AI model in a payment operation does not by itself establish that the company is a GPAI model provider. A company that places a GPAI model on the EU market under its own name may have provider obligations; a company that integrates a model into a downstream AI system has its own information needs and responsibilities. Assess each component and role rather than assigning one label to the entire product.
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Inventory models, systems, and owners
For each AI component, record whether the company develops or places the model, significantly modifies it, integrates a third-party model into a downstream system, or deploys AI in financial operations. Track the intended use, decisions affected, data inputs, model and version, limitations, validation, monitoring, human review, incidents, vendor responsibilities, and accountable internal owner. This inventory helps distinguish model-provider questions from downstream-system and deployment questions.
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The European Commission’s guidance describes GPAI provider duties that include maintaining technical documentation, providing information to downstream providers, implementing a copyright policy, and publishing a sufficiently detailed summary of training content. Providers outside the EU that place a GPAI model on the EU market must appoint an EU-authorized representative. The Commission also describes additional evaluation and risk-mitigation, incident-reporting, and cybersecurity obligations for models with systemic risk.
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As of October 4, 2026, the Commission’s stated August 2, 2025 application date and August 2, 2026 full-enforcement date for GPAI provider obligations have passed. For a GPAI model placed on the market before August 2, 2025, the Commission states a compliance date of August 2, 2027. These dates concern GPAI provider obligations; they do not summarize the full AI Act or financial-sector rules. The Commission’s guidance also gives indicative compute criteria—1023 FLOP and a systemic-risk presumption above 1025 FLOP—with case-specific qualifications. Do not treat either figure as a standalone answer to whether a particular model or use is in scope.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should a launch-readiness process produce?
The following is an internal preparation framework, not a regulator-prescribed universal checklist. Tailor it to the company, activity, and launch markets, and have qualified advisers resolve legal classification questions.
Quick Recap
- Draw the product and funds flow. Document services, customer types, sending and receiving markets, currencies, custody or control points, settlement partners, agents, and customer-facing claims.
- Build a jurisdiction and role matrix. For each planned market, list the activity, entity, counterparties, regulator, potential registration or license, possible exemption, internal owner, and supporting evidence. Analyze US federal registration and state licensing separately, and verify local requirements for every other country rather than extrapolating from US treatment.
- Assign and evidence BSA/AML controls. Identify accountable owners for risk assessment, customer due diligence, monitoring and escalation, records and reporting, agent oversight, and periodic review. Keep the evidence aligned with the company’s actual activity.
- Map the remittance journey. Where a US transfer may be covered, map the applicable Regulation E disclosures and estimates, error handling, cancellations and refunds, and agent conduct to the interface and operations. Verify the result against current official materials.
- Inventory AI roles and uses. Record model and system roles, intended uses, ownership, versions, limitations, documentation, vendor arrangements, validation, monitoring, human review, and incident processes.
- Set launch gates and review triggers. Name the person who signs off each unresolved licensing, remittance, bank-diligence, and AI Act question. Revisit the analysis when a new corridor, customer segment, funds-flow step, agent, model, or intended use changes the original facts.
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