Overview of Florida Money Transmitter Bond Requirements
Part 2 of Chapter 560 of the Florida Statutes states that applicants for a money transmitter license in the state must also obtain a money transmitter bond.
The amount of the bond is determined on a case-by-case scenario but must be at least $50,000 and no more than $2,000,000.
Who needs to get this bond?
Anyone who wants to sell or issue payment instruments or transmit money in Florida, for compensation, must become licensed as a money transmitter and obtain a surety bond.
Why do I need to get bonded?
This bond serves as a guarantee that you will comply with the obligations and responsibilities of money transmitters as defined in the Florida Statutes.
The bond is also a form of guarantee that if a transmitter violates their obligations and causes losses to any person, the latter may file a claim against the bond to claim compensation. Compensation extended to claimants may be as high as the full penal sum of the bond.
If you've never gotten bonded before and want to know more about how bonds work, see our ‘What is a surety bond' guide!
Keep reading for more information about how much it costs to get bonded, what can give rise to a claim against your bond, and how to apply!
If you want to know more about getting bonded in Florida, call us at 866.450.3412!
How Much Does the Florida Money Transmitter Bond Cost?
The surety bond cost is equal to a percentage of the total amount of the bond. That percentage is determined by the surety when you apply, based on several financial indicators.
Money transmitters in Florida must obtain a bond in an amount equal to at least $50,000 but no more than $2,000,000.
- For first-time applicants, the bond amount is equal to 2% of the projected amount of money they will handle in a year.
- For applicants who renew their bond, this amount will be based on 2% of the transfers during the previous year.
How much your bond will fully cost depends on a few different factors.
How is my bond premium determined?
Your personal credit score is the most important factor that will determine the cost of your bond. The higher your score, the lower the cost of your bond will be.
Other factors which surety will consider in determining your bond cost are:
- Your personal and business financial statements
- Your portfolio of fixed and liquid assets
- Your industry experience
Usually, applicants with a credit score of 700 or more can expect to be offered a bond at a rate between 1%-4% of the total bond amount.
You can get a free estimate of the cost of your bond through our bond calculator below!
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Can I get bonded if I have a lower credit score?
While applicants who have a high score will receive better rates on their bonds, those with a low score can also get bonded. Rates for these applicants are higher, because they are considered a greater risk for the surety.
Yet, by improving your score over time, you can improve the rates you are offered. See the Bad Credit Program page for more information about getting bonded with a low score!
When Does a Bond Claim Occur?
Surety bonds' main purpose is to guarantee compliance with state rules and regulations, as well as to provide a financial safety net for the parties the bond protects.
The bond form for the Florida money transmitter bond, states that it is “conditioned on conformance with Chapter 560, Florida Statutes.” In other words, a bonded money transmitter must comply with these provisions in order to not violate the bond agreement.
The bond is for the benefit of any claimant in Florida who has suffered losses or damages due to a violation of the bond agreement by a transmitter. In other words, if a money transmitter violates the bond agreement, and a claim is filed against their bond, the surety must investigate the situation.
If the claim is legitimate, the surety will extend compensation to claimants which can be as high as the full amount of the bond. But the claims process does not end there. After a surety extends compensation, the bonded party must repay it in full. It is a standard condition in every bond agreement that the bonded party is ultimately liable for any claims against the bond.
Given the high amounts of money transmitter bonds, it is always better to comply with a bond's conditions and avoid giving rise to any claims.
Ready to apply for your bond? Fill in our simple bond form, and we will contact you with a free quote on your bond, along with further details.
If you want to know more about the bonding requirements in Florida, call us at 866.450.3412 anytime!