Definition of Money and Money Transmitters

What is Money?

KSA 84-1-201(b)(24) defines “money” as a medium of exchange currently authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries.

A medium of exchange is an intermediary instrument used to facilitate transactions between parties. Typically, the instrument is widely recognized, has a relatively stable value, and is accepted by both transactional parties.

The same definition of money is found in Kansas’ adoption of the Uniform Commercial Code (UCC)—a comprehensive set of laws governing all transactions in the United States. It is not a federal law, but a uniformly adopted state law. All 50 states have adopted the UCC and its money definition.

What is a Money Transmitter?

Money transmitters are entities accepting currency issued by a financial agency or institution, electronic funds transfer network, or any other person engaged as a business in the transfer of funds. Examples include Western Union money transfers, PayPal, and Venmo.

HB 2560, enacted in 2024, updates the Kansas Money Transmitter Act (KSA 9-508 through 9-513e).

KSA 9-508 defines “money transmission” as engaging “in the business of the sale or issuance of payment instruments or of receiving money or monetary value for transmission to a location within or outside the United States by wire, facsimile, electronic means, or any other means, except that money transmission does not include currency exchange where no transmission of money occurs.”

KSA 9-509 authorizes the State Bank Commissioner (Commissioner) to issue money transmitter licenses. Licenses expire each year on December 31 and must be renewed by filing an application and fee with the Commissioner.

Among other items, the provision gives the Commissioner authorization to:

• Use a multi-state licensing system. Currently, the Commissioner uses the Nationwide Multistate Licensing System (NMLS);
• Establish non-refundable application fees. Currently, the fees charged by the Commissioner are:
  • New application: $1,750;
  • Change of control application: $500;
  • Out-of-state agent application: $100; and
  • Renewal fees, which are calculated using a tiered rate based on the licensee’s total transaction volume in Kansas, as reported on December 31 of the prior year, with a minimum fee of $1,000 and a maximum of $4,000 for in-state licensees;
• Require fingerprinting of individuals related to an application as deemed necessary; and
• Determine application completeness.

The provision also requires an application to meet certain conditions:

• Provide audited financial statements of the two fiscal years immediately preceding the application’s date; and
• Require each applicant to have a net worth of at least $250,000 and maintain a deposit of at least $200,000 with a Kansas bank or a surety bond in an equal amount.

KSA 9-511 exempts certain businesses and activities from the Kansas Money Transmitter Act:

• Banks, building and loan associations, savings and loan associations, savings banks, or credit unions;
• Service providers with written agreements with exempt entities that provide certain services to those exempt entities;
• U.S. government and its agencies;
• State of Kansas and its agencies; and
• Distributions, transmissions, or payments of money as a part of the lawful practice of law, bookkeeping, accounting, or real estate sales or brokerage or as an incidental and necessary party of any lawful business activity.