Kansas Money Transmitter Bond

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Kansas Money Transmitter Bond: A Comprehensive Guide

This guide provides information for insurance agents to help money transmitters obtain Kansas Money Transmitter Bonds

At a Glance:

  • Lowest Cost: $3,000 per year or $300 per month based on the applicant’s credit
  • Bond Amount: $200,000 for first time license applicants (more on this later)
  • Who Needs it: All money transmitters operating in Kansas
  • Purpose: To ensure the public will receive compensation for any damages should the money transmitter fail to comply with licensing law
  • Who Regulates Money Transmitters in Kansas: The Kansas Office of the State Bank Commissioner
Kansas Money Transmitter Bond Form
Kansas Money Transmitter Bond Form


Kansas statute 9-509 requires all money transmitters operating in the state to obtain a license with the Office of the State Bank Commissioner. The Kansas legislature enacted the licensing laws and regulations to ensure that money transmitters engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, money transmitters must purchase and maintain a $200,000 surety bond to be eligible for licensure.

What is the Purpose of the Kansas Money Transmitter Bond?

Kansas requires money transmitters to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the money transmitter fails to comply with the licensing regulations set forth in Kansas statute 9-509. Specifically, the bond protects consumers in the event the money transmitter does not properly account for all funds received and fails to pay all money owed to consumers. In short, the bond is a type of insurance that protects the public if the money transmitter breaks licensing laws.

How Can an Insurance Agent Obtain a Kansas Money Transmitter Surety Bond?

BondExchange makes obtaining a Kansas Money Transmitter Bond easy. Simply login to your account and use our keyword search to find the “money” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How is the Bond Amount Determined?

Illinois statute 9-509 dictates that the limit on the Kansas Money Transmitter Bond be a minimum of $200,000. Additionally, the statutes grants the State Bank Commissioner the authority to increase the bond amount to a maximum of $1 million based on the following factors:

  • The volume of money transmission business transacted in Kansas
  • The impaired financial condition of the money transmitter, as evidenced by a reduction in net worth or financial losses

Is a Credit Check Required for the Kansas Money Transmitter Bond?

Surety companies will run a credit check on the owners of the money transmission company to determine eligibility and pricing for the Kansas Money Transmitter bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Kansas Money Transmitter Bond Cost?

The Kansas Money Transmitter surety bond can cost anywhere between 1.5% to 7.5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $200,000 bond requirement.

$200,000 Money Transmitter Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
800+ $3,000 $300
650 – 799 $4,000 $400
600 – 649 $8,000 $800
550 – 599 $15,000 $1,500

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Kansas Define “Money Transmitter?”

To paraphrase Kansas statute 9-508, a money transmitter is any business entity who receives funds for transmission either inside or outside the US by wire, facsimile, or any other means. Money transmitters do not engage in currency exchange when no transmission of money occurs.

Kansas Money Transmitter Bond

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How do Money Transmitters Apply for a License in Kansas?

Money Transmitters in Kansas must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.

License Period – The Kansas Money Transmitter License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Meet the Net Worth Requirements

Applicants for the Kansas Money Transmitter License must have a company net worth (assets – liabilities) of at least $250,000. Applicants must submit an audited financial statement, prepared by a CPA, verifying their net worth when submitting their license application.

Step 2 – Purchase a Surety Bond

Money transmitters must purchase and maintain a surety bond with a minimum limit of $200,000

Step 3 – Request a NMLS Account

The Kansas Money Transmitter License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, applicants must first request to obtain an NMLS account.

Step 4 – Complete the Application

All Kansas Money Transmitter License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:

    • Audited financial statements indicating a company net worth of at least $250,000
    • List of all authorized agents who perform money transmission services on behalf of the applicant
    • Primary company and consumer complaint contact information
    • FinCen confirmation number and filing date
    • Name and addresses of all clearing banks associated with the money transmission business
    • Independently reviewed AML/BSA policy
    • Company business plan containing the following information:
      • Marketing strategies
      • Products
      • Target markets
      • Fee schedule
      • Operating structure
      • Method and types of activities and operations
      • Proposed location of operations and outlets in Kansas
      • Anticipated growth in volume and in number of transactions at the end of the first two years of operation in Kansas
      •  If activities include issuing prepaid access cards or similar products, explain how the program will work. Include details about loading, reloading and activation of the cards
    • Flow of funds structure
    • Certificate of Good Standing obtained from the Kansas Secretary of State
    • Company formation documents
    • Management chart detailing the company’s hierarchy
    • Organizational chart detailing the company’s ownership structure
    • List of the company’s permissible investments

Money transmitters must pay the following fees when submitting their license application:

    • $1,170 application fee
    • $36.25 background check fee (per person)
    • $15 credit report fee (per person)
    • $0.25 annual fee for all authorized agents (the first 100 agents are exempt from this fee)

How Do Kansas Money Transmitters Renew Their License?

Money transmitters can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Kansas Money Transmitter License expires on December 31 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Kansas Money Transmitter License?

The State of Kansas does not require money transmitters to obtain any form of liability insurance as a prerequisite to obtaining a business license. Money transmitters must purchase and maintain a surety bond with a minimum limit of $200,000.

How Do Kansas Money Transmitters File Their Bond?

Money transmitters should submit the completed bond form, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from both the surety company that issues the bond and a representative from the money transmission company. The surety company should include the following information on the bond form:

  • Legal name and NMLS number of entity/individual(s) buying the bond
  • Surety company’s name
  • Bond amount
  • Date the bond is signed

What Can Kansas Money Transmitters Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, money transmitters in Kansas must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud
  • Properly account for all funds received
  • Pay all funds owed to consumers

What Other Insurance Products Can Agents Offer Money Transmitters in Kansas?

Kansas does not require money transmitters to purchase any form of liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Kansas Money Transmitter Customers?

The NMLS conveniently provides a public database to search for active money transmitters in Kansas. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

Kansas Money Transmitter Bond