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HMRC internal manual

Money Laundering Regulations: Compliance

HM Revenue & Customs
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Business sector specific Guidance: Money Service Businesses: Introduction- Money Transmitters

Money transmitters transfer money from one location to another without the physical cash moving. Often this may involve exchanging currency as well though this is usually incidental to the money transmitting activity.

Methods that are generally used for transmitting money include the following.

* Business can be done electronically, by telephone or over the counter with electronic transfers becoming more popular.
* Money transmission can operate within or outside the formal financial system though most money transmitting relies on the use of banks at some stage in the transactions. 
* Although a significant amount of money is transmitted through branches of Fexco MT and Moneygram Payment Systems both of these are assured as Large Businesses. 

The remaining small Money Transmitters operate systems that were developed centuries ago as a way of moving money over long distances. They operate alongside major money transmitters such as Fexco MT and Moneygram and remain the main way of transmitting money in some communities.

The business of money transmitting has different names within different communities.

They include:

* Hawala or Hundi 
* Fei ch ien 
* Chit
* Chop

Although each name sounds very different the principals are all basically the same and rely on trust between the operator and the customer.

Money Transmission is often carried out by Agents acting on behalf of larger transmitters known as principals. Detailed guidance on the registration requirements as they effect businesses in this type of relationship and responsibilities for anti money laundering policies can be found at MLR3C17050. Further guidance is also available in the Registration Guidance for MSBs at Appendix 4 (paragraphs 4.2.8 and 4.2.9).